There is a market observation that veteran gold traders share: gold that holds its ground in the face of everything — stronger jobs, missile strikes, a hawkish Fed, a strong dollar — is gold that is building a foundation for its next major move. This Sunday May 10, with gold at $4,715 per ounce, that observation has never felt more apt.
Consider what gold has absorbed in the past ten days. On Friday May 8, April Nonfarm Payrolls came in at 115,000 — nearly double the expected 62,000. A strong jobs number should push the dollar higher and gold lower. Gold dipped briefly, then recovered to close up 0.63%. On Thursday May 7, Iranian forces fired missiles and drones at three US destroyers transiting Hormuz. Military escalation should push gold sharply higher as a safe haven. Gold moved modestly higher, then calmed. The ceasefire held nominally. Trump threatened “one big glow coming out of Iran.” Iran called Hormuz its “atomic bomb.” Gold held $4,700. Now this Sunday, intensive diplomacy has concluded in Miami — the Qatari PM met with Vance, Rubio, and Witkoff — and Iran is expected to respond to the US peace proposal through Pakistan this week. Gold is at $4,715.
An asset that absorbs a job beat, a military strike, a presidential war threat, and a diplomatic marathon and still closes the weekend at $4,715 is an asset that has found a floor. The question for this week is whether it also has a ceiling — and that answer comes from Tuesday’s CPI for April and Wednesday’s PPI.
Saxo Bank’s Head of Commodity Strategy Ole Hansen put it precisely this weekend: gold “needs to clearly break above $4,850 to confirm an uptrend” and the current period is one where “investor sentiment is shifting” as “the market seems less concerned about the Middle East conflict” but “a peace process is still a long way off, keeping the market in a cautious state.”
The gateway is $4,850. The events of this week will either open it or keep it closed until June.
