During the Asian session on Wednesday (August 5), spot gold fluctuated narrowly around $4,560/oz, while silver consolidated around $40.8/oz, with intraday ranges noticeably narrowing. The market is waiting for the US July non-farm payroll report due Friday to gauge the Fed's next policy path.
Market review: gold and silver consolidate at highs, waiting for direction
As of press time, spot gold was at $4,592.3/oz, down $2.7 from the previous session, a decline of 0.06%. The intraday low was $4,578.2 and the high was $4,605.6, showing an overall high-level consolidation pattern. Spot silver was at $40.85/oz, down 0.3%, trading in an intraday range of $40.52 to $41.10. In the previous week, both gold and silver recorded significant gains amid rising Fed rate cut expectations and Middle East geopolitical disruptions, but momentum weakened this week, with both bulls and bears appearing cautious.
The US dollar index is trading around 104.35 today, rebounding slightly from yesterday. The 10-year Treasury yield rose to 4.14%, and the slight uptick in real yields put some pressure on gold. However, safe-haven demand and the global central bank gold-buying wave continue to provide support below, preventing a deep decline. Market participants note that gold and silver have been hovering at highs for several consecutive sessions, a typical pattern of accumulation before direction selection.
Non-farm payroll preview: key data may become short-term directional indicator
At 20:30 Beijing time this Friday, the US Department of Labor will release the July non-farm payroll report. According to surveys from authoritative institutions, economists generally expect 185,000 new non-farm jobs added, lower than the revised 205,000 in the previous month; the unemployment rate is expected to hold at 4.2%; average hourly earnings are expected to rise 0.3% month-on-month, with the year-on-year growth slowing to 3.7%.
This data is crucial because the market has not yet formed a consensus on whether the Fed will cut rates in September. CME FedWatch data shows the market pricing a 62% probability of a 25-basis-point rate cut in September, down from 70% a week ago. If non-farm data significantly beats expectations, it will strengthen the view of US labor market resilience, may further cool rate cut expectations, and thus put short-term pressure on gold and silver. Conversely, weak data could reignite rate-cut trades and push precious metals to challenge record highs again.
Analysts at Seabank Precious Metals Research Institute noted: "Judging from recent Fed officials' speeches, internal differences over the timing of rate cuts remain significant. July non-farm payrolls are the most important economic indicator before the August Jackson Hole global central bank symposium, and their performance will directly affect Powell's policy tone. The rise in the volatility index of gold and silver this week reflects the market waiting for this key risk event to materialize."
Asian physical demand recovers, gold ETFs continue to attract inflows
Beyond macro data suspense, physical demand in Asia is showing seasonal recovery signs. With India's Diwali (October) stocking season approaching, Mumbai gold and jewelry merchants have begun accelerating purchases of gold ornaments and bars, with dealers reporting order volumes up about 12% month-on-month. At the same time, as the RMB exchange rate has stabilized recently, the gold premium at the Shanghai Gold Exchange remains at $8-10 per ounce, indicating that domestic buying interest has not faded.
In terms of capital flows, global gold ETFs have recorded net inflows for four consecutive trading days since late July, with Asian markets contributing about 35% of the total. Latest data from the World Gold Council shows that Asian physical gold investment demand grew 28% year-on-year in Q2, with China and India continuing to act as core drivers. Analysts believe that against the strategic backdrop of continued central bank gold accumulation, long-term Asian allocation capital provides solid support for gold's price floor.
Technical analysis: key levels clustered, breakout conditions gradually maturing
On the technical charts, gold's daily moving average system remains in a bullish alignment, the MACD shows a bullish crossover, but the RSI has entered overbought territory, suggesting short-term technical correction needs. Currently, multiple resistance levels are concentrated around $4,615, which corresponds to the 61.8% Fibonacci extension of the previous rebound; once effectively broken, it will open a channel toward $4,650. On the downside, dense support lies in the $4,570-4,580 region, with the 20-day moving average near $4,530 further below.
Silver's technical picture is similar to gold's. It faces pressure at $41.2 in the short term, and a break above would pave the way to the $42 round-number level. Below, $40.5 is the primary support; if lost, the next downside target is $39.8. From a gold-silver ratio perspective, the current ratio remains at a relatively high level around 112. If silver industrial demand continues to strengthen, catch-up gains cannot be ruled out.
Outlook: maintain range-bound thinking before non-farm data, risk control first
In summary, in the remaining trading sessions this week, the precious metals market is likely to maintain range-bound consolidation until the non-farm data provides direction. For traders, a strategy of light positions plus pending breakout orders is advisable rather than blindly chasing rises or falls. If the market experiences sharp volatility after the data release, strictly adhere to preset stops and do not hold positions against the trend.
The medium-to-long-term driving logic has not changed—global central bank gold buying, Treasury yields near their peaks, geopolitical uncertainty, and the recovery of Asian physical demand all provide structural support for precious metals. Even if non-farm data triggers a short-term pullback, unless the macro environment fundamentally reverses, relatively low gold levels can still be viewed as medium-term allocation opportunities.
Seabank Precious Metals reminds investors: the precious metals market is highly volatile; please ensure you manage positions appropriately based on your own risk tolerance. We will continue to track US non-farm data and Fed officials' speeches, providing professional interpretations promptly. Stay tuned.
