Gold prices traded firmly in range on Friday, and the latest U.S. Nonfarm Payrolls (NFP) report couldn't muster much energy. With President Trump increasingly applying pressure to Federal Reserve Chairman Jerome Powell to lower interest rates, the question now is: will political pressure finally change the Fed’s bias — or will gold need a different catalyst to break out?
Tempered NFP Impact: No Breakout Yet
The June NFP print was close enough to expectations, with solid but decelerating job growth. And markets barely missed a beat, with gold still trading between $3,437 and $3,165. The metal has effectively stalled, range-bound in a narrow range as conflicting pressures — ongoing inflation and faltering macro indications — neutralize directional trades.
Gold price chart by XTB
The lack of surprise in employment figures leaves investors looking for a spark.
President Trump Cranks Up the Heat on Powell
In a bold political maneuver, President Trump is applying pressure to Jerome Powell to cut interest rates, stating high borrowing costs are squeezing economic growth and
hurting American competitiveness. Trump's criticism mounted in recent weeks, calling for "urgent monetary easing" and blaming the Fed for strangling growth.
Nevertheless, Powell has remained publicly committed to a data-driven policy. Inflation remains above the Fed's 2% target, and the central bank is not keen to act on political pressure alone — especially as the Fed seeks to maintain its independence in the context of the election cycle.
But if Trump's political determination is converted into broader economic policy shifts or mounting Congressional pressure, the markets can begin to price in a faster pivot.
What If Powell Doesn't Fold?
If Powell stands firm in the face of political pressure, traders might have to live with the fact that the Fed will remain on hold unless inflation keeps weakening further. Gold might then keep grinding sideways or even trend lower in the absence of a new dovish theme. Real yields will keep sucking the momentum out of gold unless there is a rate cut or new geopolitical risk.
That is, gold may be running out of reasons to rally — unless something breaks.
What to Watch Next Week
- Fed Commentary: Indications of future Fed speeches or FOMC minutes can expose internal disagreements or policy changes.
- Dollar and Yield Movement: A weaker dollar or declining real yields would help gold go up.
Conclusion: Gold remains in a holding pattern. Employment numbers today couldn't deliver the spark, and now everyone turns to inflation readings next week and the Trump-Powell politicking. If Trump can prompt the Fed to dovishness, then gold will break out sooner than later. In the meantime, traders are left to trade the range — and wait on Washington.