XAU/USD at Record Highs: Awaiting the Non-Farm Payrolls Shock

Historically, August–September is often a period of high volatility for gold. This is usually driven by factors such as increased physical demand, year-end preparations where many institutions rebalance their portfolios, and macroeconomic sentiment.

In terms of price scale, the rally has reached almost $400 per ounce. This is a significant range, indicating strong trend momentum after three months of sideways consolidation. Typically, a prolonged sideways phase serves as an accumulation/distribution stage. Once a breakout occurs, volatility explodes.

Figure 1. XAUUSD D1 Chart – October 01, 2025

Fundamental Highlight This Week

Non-Farm Employment Change (Fri, October 03, 2025)

Key Facts

• Last data (August 2025): Nonfarm payrolls +22,000 (net), well below expectations; 3-month average ~29k jobs — a clear sign of a strong cooling in the U.S. labor market.
  
• Wages (average hourly earnings) rose +0.3% m/m in August. Consensus for September (pre-release): Many research houses project around +40–75k (some surveys place the consensus near ~50k) with unemployment near 4.3%. (Exact figures differ across polls). The market will also closely watch average hourly earnings and revisions of previous months.

Scenarios and Market Impact

1) If the number comes in ~in line with consensus

• Markets: Seen as “soft but expected” → market reaction likely measured. USD may stay stable/hold; Treasury yields could be flat or slightly lower if data supports easing expectations. Equities may be modestly positive (risk-on) if markets interpret it as: “soft enough for a dovish Fed but not a collapse.”
  
• Fed Policy: No immediate shift — Fed consensus likely to continue considering rate cuts if the cooling trend persists, but actual decisions will depend on inflation and wage data.
  

2) If the number comes in well below expectations

• Markets: USD weakens, Treasury yields fall (flight to bonds / stronger rate cut bets), gold likely rises, equities could gain short-term on hopes of faster rate cuts but if the number is very weak, it could trigger recession fears, pulling stocks down.
  
• Fed Policy: Higher probability of earlier/larger rate cuts (accelerating the easing cycle). Other central banks may also adjust if capital flows shift.
  

3) If the number exceeds expectations

• Markets: USD strengthens, Treasury yields rise (Fed may delay/slow cuts), equities could correct especially rate-sensitive sectors (growth/tech) while banks could benefit (margin expansion).
  
• Fed Policy: Pressure to delay rate cuts; probability of a cut at the next meeting decreases, leading bond and derivatives markets to reprice expectations.

Technical Analysis

Looking at today’s price action, gold is currently facing a crucial resistance. This level serves as a short-term directional pivot, as the market seems uncertain whether to extend its bullish push or take a brief correction.

However, on closer inspection, the breakout potential looks increasingly likely. Just a day earlier, gold successfully broke through a minor resistance, then performed a clean retest of its new support area. Such a pattern often indicates that the market is building momentum to continue the rally.

Figure 2. XAUUSD H1 Chart – October 01, 2025

Gold is currently trading at a highly crucial level, where the market is directly facing a key resistance around the 3,878 area. This level could trigger the next significant move, as a strong breakout above it may open the door for gold to move toward higher levels.

For traders, there are two main scenarios to consider. The first is to wait for a breakout above the 3,878 resistance, then wait for a retest as confirmation before taking a long position.

Figure 3. XAUUSD H1 Chart – October 01, 2025

The second scenario, for more aggressive traders, is to prepare a long position around the 3,795 support area if the price pulls back and retests that level.