Gold prices broke out of a descending channel near $4,716 this week, shifting to a bullish trend after holding above key support. Traders now eye $4,850 as the next immediate target, with Friday's Non-Farm Payrolls report set to drive fresh volatility. A drop below $4,670 would erase recent gains and refocus attention on $4,540.
Technical Breakthrough Confirmed
The XAU/USD pair cleared the descending channel resistance at $4,716, marking the first sustained bullish shift since early April. This move followed a higher low above the $4,609 Fibonacci support level on the daily chart, reinforcing the new uptrend structure. Traders interpreted the breakout as a decisive shift in momentum after weeks of range-bound trading.
Profit-Taking Before Key Data
Prices pulled back to $4,692 after hitting the $4,772 target on May 7. Market participants took profits ahead of Friday's jobs report, avoiding overexposure during the quiet pre-data period. The retreat held above $4,670, preserving the bullish setup while thinning out leveraged positions ahead of volatility.
Target Zones in Focus
Gold's next immediate target stands at $4,850, with a secondary move toward $5,131 likely if the $4,843 Fibonacci level breaks. Technical analysts emphasize that holding above $4,670 remains critical—the level that would invalidate the current bullish thesis and trigger renewed selling pressure toward $4,540. The $4,609 support level now serves as a floor for any deeper corrections.
Jobs Report as Catalyst
Friday's Non-Farm Payrolls data represents the market's next major catalyst, with consensus estimates pointing to 185,000 new jobs. Every tick below that number could accelerate gold's advance as traders price in delayed Fed rate cuts. The report's wage growth component carries equal weight, with hotter-than-expected figures potentially sparking a sharp pullback in the yellow metal.
Traders must close positions by 8:25 a.m. ET Friday as the Labor Department releases May's jobs data, with gold likely reacting within 60 seconds of the report.
