Gold remained below a more than two-week high on Friday, but it was on track for strong gains after three weeks. Markets awaited the US Nonfarm Payrolls (NFP) data due later in the day.
Fighting around the Strait of Hormuz continued, while hopes of a US-Iran deal pushed Crude Oil lower. That eased inflation worries and reduced expectations of a more hawkish Federal Reserve, limiting US Dollar gains and supporting gold.
Us Iran Ceasefire Tensions
US Central Command said US forces struck Iranian sites linked to attacks on warships in the strait. Iran said the US broke the ceasefire, while Donald Trump said the ceasefire remained in place and the US military said it did not seek escalation.
Rate-cut expectations were pushed back to late 2027 or early 2028, which helped limit falls in the US Dollar and capped gold’s rise. The NFP report is forecast to show 62K jobs added in April versus 178K previously, with unemployment at 4.3% and average hourly earnings up 3.8% year on year.
Technically, gold stayed above the 200-period SMA and the 61.8% retracement, with RSI at 64.24 and MACD near 6.13. Support levels were $4,703.51, $4,665.16, $4,587.31 and $4,493.39, with resistance near $4,891.35.
Today, May 8th, 2026, the US jobs report for April has been released, showing a significant miss on expectations. The economy added only 35,000 jobs, far below the forecasted 62,000, while the unemployment rate unexpectedly ticked up to 4.4%. This data confirms a cooling labor market and fundamentally changes the outlook we held just a few days ago.
Positioning After The Nfp Shock
This weak employment data has put Federal Reserve rate cuts firmly back on the table for this year, directly contradicting the previous consensus that held off cuts until late 2027. We saw a similar rapid repricing of expectations during the economic slowdown fears of 2024, where markets quickly pivoted. The CME FedWatch Tool now indicates a nearly 40% chance of a rate cut by the end of 2026, a dramatic shift from less than 5% last week.
For gold derivative traders, this is a clear bullish signal, and we have already seen the price surge past the $4,891 resistance level mentioned previously. With falling interest rate expectations and a weaker US Dollar, call options or bull call spreads targeting the $5,000 psychological level appear attractive. The recent Q1 2026 report showing continued strong central bank gold purchases, totaling over 250 tonnes, provides a solid fundamental backdrop for this move.
The US Dollar Index (DXY) immediately broke below the key 102.00 support level on the news, making gold cheaper for holders of other currencies. This weakness is likely to persist as long as the market anticipates Fed easing. Traders should consider strategies that benefit from a declining dollar, such as put options on USD-centric currency pairs.
Regarding crude oil, the focus has shifted from geopolitical tensions to the risk of a broader economic slowdown, which implies lower energy demand. While the situation in the Strait of Hormuz remains a source of volatility, the weak US jobs data is now the dominant factor weighing on prices. This suggests that any price spikes from Mideast headlines may be short-lived and could present opportunities to initiate short positions.
