The Fed’s non-commitment to a September pause did little to excite bullion bulls, leaving both policymakers as well as gold traders in “data dependent” mode over the next 8 weeks.

With “data dependent” mode on, bullion eased back into the mid-$1900s after better-than-expected US economic data extended the dollar’s recovery on Thursday.

Yesterday’s higher-than-expected Q2 GDP and the lower-than-expected weekly jobless claims contributed to the narrative that the Fed can’t yet afford to halt its rate hikes, adding to bullion bulls’ frustrations.

At the time of writing, gold is set to post a weekly decline and end a run of three consecutive weekly gains, with the precious metal testing support around where its 21-day and 50-day simple moving averages (SMA) are converging.

The upcoming US jobs report due Friday, August 4^th is set to have a major say whether spot gold moves closer to $1900 or $2000 by this time next week.

A stronger-than-expected July nonfarm payrolls report which sets the stage for a September Fed rate hike should force the precious metal to retreat further.

On the flip side, a softening US labor market that allows the Fed to back away from another rate hike should help restore spot gold back toward recent highs above $1980.

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