Gold has surged to a fresh all-time high at US$3,547. The immediate question is whether the market is positioning for a classic “buy the rumour, sell the fact” move into Friday’s data. In other words, has gold already priced in the dovish outcome many expect—leaving it vulnerable to a short-term shakeout once the news actually lands?
Walking Into NFP — Friday, 5 September
August data are widely viewed as soft enough to cement a September Fed cut. Consensus looks like this:
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Non-Farm Payrolls:+78k (a touch above July’s +73k, but well below the 2024 average of +168k).
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Unemployment Rate: up to 4.3% from 4.2% in July.
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Hourly Wages:+0.3% m/m, unchanged from July.
Taken together, these figures reinforce a narrative of a labour market losing momentum—slower job creation, a gentle rise in unemployment, and plateauing wage pressures. That mix adds weight to the Fed’s dovish pivot, with a September rate cut now seen by many as highly likely. It’s also worth repeating: jobs data are lagging indicators. They say little about the very near-term path of growth and are often revised, which is why they can mislead investors who treat the initial print as gospel.
Why This Matters for Gold
Gold’s strategic bid is anchored in declining real yields, elevated fiscal deficits, and persistent liquidity needs in the system. On top of that, central bank accumulation and structural demand from investors looking for diversification continue to provide a sturdy backdrop. If policy rates are moving lower while inflation settles above pre-pandemic norms, real rates can remain contained, and that’s typically constructive for bullion over a multi-year horizon.
Near-Term Setup: Stretched but Supported
Tactically, the market looks over-extended in the short run. Momentum strategies and CTA-style buying have chased strength into the print. That creates asymmetry:
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If NFP is soft as expected, we could still see a “sell the fact” reaction—booked profits and a quick shakeout after the news.
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If NFP surprises stronger, the knee-jerk could be sharper: real yields bounce, the dollar firms, and gold pulls back.
None of that changes the bigger picture. The world is working through a prolonged monetary debasement dynamic—high debt loads, structural deficits, and a policy bias that ultimately favours liquidity provision over austerity. That backdrop doesn’t resolve in a quarter or two; it tends to support precious metals through cycles.
Conclusion
Expect volatility around Friday’s release and respect the risk of a tactical pullback—especially after such a powerful run. But let there be no confusion: the secular bull market in precious metals remains intact, in my view. Every dip—particularly any meaningful correction—should be evaluated as a buying opportunity within that longer-term framework. As always, size positions thoughtfully, scale entries where possible, and keep an eye on the USD, real yields, and policy path—the core drivers for gold’s next leg.