Yesterday, gold surged from around 4060 all the way to 4268, posting a single‑day gain of over 4%. The daily chart closed with a strong bullish candlestick, breaking through the multi‑month consolidation range. In my view, this rally is more than a technical breakout; it marks a reversal in market sentiment, driven by short‑covering and capital inflows, which has fully ignited bullish sentiment. Gold is currently consolidating at high levels near 4280 in early trading, maintaining an overall strong bias.

July ADP private‑payroll data showed only 44,000 new jobs, well below market expectations. This prompted the market to scale back odds of a Federal Reserve rate hike in September. US Treasury yields and the US dollar fell in tandem, lifting valuation for the non‑yield‑bearing asset gold. This serves as the core catalyst behind the current rally.

Signs of de‑escalation emerged in the Middle East, with growing expectations for shipping resumption through the Strait of Hormuz. Oil prices tumbled accordingly, easing inflation concerns and further diminishing the case for aggressive Fed rate hikes, which lent additional support to gold.

Today’s key release is US Initial Jobless Claims. More importantly, watch how the market prices expectations for Friday’s Non‑Farm Payrolls. Expect significantly amplified volatility across the board. My advice is to reduce position sizes heading into Non‑Farm Payrolls to mitigate news‑driven risks.

Short‑term trading strategy:
Go long on stabilised pullbacks within the 4260‑4270 zone.
Targets at 4290‑4300; break‑extension target at 4330.