Gold remains depressed as reviving Fed rate hike bets and Iran risks underpin USD

The price of gold has been under pressure for two days straight, though it remains above the $4,400 level during the Asian trading session. The commodity has held above Friday's swing low, set in response to positive US job data. The US Nonfarm Payrolls (NFP) report indicated a stronger-than-expected employment surge, with 162,000 new jobs added in August, well above the 56,000 estimate.

The unemployment rate remained unchanged at 4.1%, while wage inflation slowed to 3.1% from the previous 3.2%. These economic indicators, alongside rising energy prices and speculation of an impending Federal Reserve (Fed) rate hike, have contributed to the depreciation of the US Dollar (USD) and put downward pressure on gold. TD Securities highlighted that the robust US labor market, bolstered by both official figures and private sector data, suggests that the job market is improving.

Fed Governor Christopher Waller has expressed openness to maintaining current interest rates if inflation eases as indicated by upcoming data. The US Producer Price Index (PPI) and Consumer Price Index (CPI) will be released on Thursday and Friday, providing further clues about the Fed's future policy stance. Geopolitical tensions between the US and Iran in the Strait of Hormuz continue to add to the safe-haven appeal of the US Dollar, supporting its value and putting further downward pressure on gold.

The XAU/USD pair has been trading above the 200-day Exponential Moving Average (EMA) at approximately $4,318 and the 50% retracement of the recent upswing, around $4,324. Immediate resistance is at the 38.2% Fibonacci retracement near $4,411, with a break above this level potentially exposing the 23.6% retracement around $4,519 and the 4,693 region.

Should the price decline, support can be found at the 50% retracement ($4,324), closely aligned with the 200-day EMA ($4,318), with further support at the 61.8% level ($4,237) and 78.6% retracement ($4,113).