Dollar Extends Gains as Strong US Data Revive Inflation Concerns
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Dollar Extends Gains as Strong US Data Revive Inflation Concerns

Published: 2 October 2026,06:35

Published: 2 October 2026,06:35

Daily Market Analysis New

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Key Takeaways:

*The Dollar Index extended its gains after stronger-than-expected US employment data.

*Initial Jobless Claims fell to 197K, while ADP employment increased by 90K.

*Attention now turns to the US Nonfarm Payrolls report for the next major market catalyst.

Market Summary:

Strong US Data Keep the Dollar on a Bullish Footing

The US Dollar extended its rally after another round of stronger economic data reinforced expectations that the US economy remains resilient.

Initial Jobless Claims came in at 197K, better than expectations of 201K, while ADP Employment Change increased sharply to 90K. The latest figures helped ease some concerns over labour-market weakness and provided further support to the greenback ahead of the upcoming Nonfarm Payrolls report.

Inflation risks also returned to focus. The ISM Manufacturing Prices Index surged from 71.1 to 77.9, significantly above expectations of 72.9. Although the recent Core PCE report showed some easing in inflation, the sharp rise in manufacturing prices suggests underlying price pressures may still remain elevated.

This combination of resilient employment conditions and renewed inflation concerns could keep expectations for tighter Federal Reserve policy supported, providing a favourable backdrop for the dollar.

The greenback has also benefited from weakness in the euro. Growing concerns surrounding France’s fiscal position have pressured European assets and encouraged some investors to shift exposure toward the US dollar, adding another source of support for the Dollar Index.

For now, attention turns toward the Nonfarm Payrolls report. Another strong employment reading could reinforce the dollar’s bullish momentum, while weaker-than-expected data may trigger some profit-taking.

Gold Remains Under Pressure Ahead of NFP

Gold prices remained relatively flat but continued to trade with a bearish bias as the stronger US dollar reduced the appeal of dollar-denominated bullion.

The combination of resilient labour-market data and renewed inflation concerns has also kept expectations for tighter monetary policy elevated. Higher interest-rate expectations generally increase the opportunity cost of holding non-yielding assets such as gold.

However, market positioning ahead of NFP may keep gold volatile. Following the recent decline, some investors may attempt to position for a potential rebound if the employment report disappoints.

A weaker-than-expected NFP could pressure the dollar and Treasury yields, potentially allowing gold to recover. On the other hand, another strong jobs report could reinforce expectations for tighter Fed policy and extend the bearish pressure on bullion.

For now, NFP remains the key catalyst for both the US dollar and gold, with the employment report likely to determine whether the dollar extends its breakout or gold stages a meaningful recovery.

Technical Analysis

GOLD, H4

Gold prices are trading lower, currently testing the 4,115.00 support level, which acts as a crucial near-term downside pivot.

Market attention is focused on a potential breakdown below 4,115.00. A confirmed break below this level could extend losses toward the next support at 3,990.00, reinforcing the bearish short-term structure. Momentum indicators remain tilted to the downside. The MACD is showing diminishing bullish momentum, while the RSI at 47 stays below the midline, suggesting that gold may continue to hold a bearish bias if selling pressure persists.

However, if bearish momentum begins to fade, gold may stage a technical rebound and retest the 4,260.00 resistance level, followed by 4,425.00 if recovery momentum strengthens.

Resistance Levels: 4,260.00, 4,425.00

Support Levels: 4,115.00, 3,990.00

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