Gold Holds Above $4,050 as US Dollar Weakens and Fed Bets Shift Ahead of Key US Jobs Data

Cross-market tug on bullion

Gold traded in a narrow band above the $4,050 mark on August 4, recovering from an intraday low near $4,042 to roughly $4,087 in the New York morning window after a softer US dollar and lower Treasury yields offset rising oil prices and sticky Fed hike expectations. The cross-source picture is consistent: a weaker DXY, around 99.96, and a retreat in CME FedWatch September hike pricing toward 57–64% provided the floor, while Brent near $84.20 and WTI near $75.50–$80.71 kept inflation and rate concerns capping the upside.

The source basis differs in timing rather than direction. fxstreet.com reported the move in real time with a deal-driven dollar drop, citing remarks from US Treasury Secretary Scott Bessent on possible talks with Iran, while etnownews.com captured an earlier Asian session view in which oil had not yet retraced, leaving Brent higher and WTI above $80. The convergence is that the same two forces — dollar weakness and oil-driven rate-risk — are pulling in opposite directions on gold, leaving the metal range-bound rather than trending.

Diplomatic signal from the Strait of Hormuz

A reported diplomatic opening on the Strait of Hormuz was the proximate trigger for gold’s New York session bounce. fxstreet.com reported that Bessent told CNBC the US “is in talks with the Iranians” and that “there is a chance we may have a deal today or tomorrow,” with Al Arabiya, citing a senior source, saying an announcement on reopening the strait could come shortly. Tehran had not publicly confirmed direct talks or any reopening agreement at the time of writing.

The bounded uncertainty is that the dollar and oil response — DXY sliding and WTI hitting a three-week low near $75.50 — is conditional on the deal materializing. If talks stall, the same liquidity dynamic could reverse, and the prior 21-day and 100-day SMAs near $4,062 and $4,407 would re-anchor the chart.

Chinese bargain buying and the physical market

Demand-side support was visible in Asia, where Chinese institutional flows pushed gold back above the $4,000 threshold. Bloomberg, cited on August 3, reported that Chinese gold ETFs had logged 14 straight sessions of net inflows through that day, the longest streak since March, with HuaAn Fund analyst Steve Zhou tying the buying to weakness in Chinese equities, where the CSI300 fell roughly 8% in July and ended a three-month rally.

The physical market echoed the ETF signal. MKS PAMP’s Bernard Sin said inventories were “being depleted at an unusually rapid pace” as the Shanghai Gold Exchange premium over the London benchmark allowed banks to source metal more cheaply overseas, with Chinese bank inquiries continuing. Sin cautioned that the rebound had not yet reached “panic buying,” suggesting the demand pulse is supportive but not yet large enough on its own to drive a sustained rally.

Short-term outlook into US payrolls week

Direction into the rest of the week is being driven by the US data calendar rather than spot price action. fxstreet.com flagged Deutsche Bank’s July NFP forecast of +65k jobs versus June’s +57k, an unemployment rate seen steady at 4.2% with upside risk to 4.3%, and average hourly earnings of +0.3% month-on-month. The June JOLTS release at 14:00 GMT on August 4 was the first test: reported openings fell to 7.359 million from 7.594 million, slightly below the 7.4 million consensus, nudging September hike odds down to 57.1% from 67.2% on the CME FedWatch tool.

Technically, fxstreet.com’s forecast piece put XAU/USD flat at $4,050.80, holding below the 20-day EMA at $4,072.96 with RSI (14) in a neutral 40–60 range; resistance sits at the 20-day EMA then the July 22 high near $4,166, with last week’s low at $3,996.13 and the June 30 low at $3,941.76 below. The bounded uncertainty is whether softer labor prints will be enough to retest the $4,100–$4,166 band, or whether renewed oil strength from a Hormuz deal collapse keeps the metal pinned under the 100-day SMA near $4,407.

What to watch next

The remaining US calendar — ADP Employment Change on Wednesday, initial jobless claims and Friday’s July NFP — is the most likely catalyst for a break from the $4,040–$4,090 range. A parallel variable is any official confirmation, or denial, of a Strait of Hormuz reopening agreement, which would re-rate both oil and the dollar and reset Fed pricing in the same move.