Spot gold staged a strong rebound on May 9, gaining 0.8% in a single day to close at $3,328.96 per ounce — its highest level in nearly a month. This rally was driven by a mix of supportive factors, including early signs of a cooling U.S. job market, rising geopolitical tensions, and continued gold purchases by central banks around the world.

Last week’s U.S. jobless claims dropped to 228,000, still below market expectations but only slightly down from the previous week’s 241,000. The smaller-than-expected decline suggests some softening in the labor market. In response, investors began to adjust their expectations for the Federal Reserve’s next moves on interest rates. The U.S. Dollar Index fell from 105.20 to 104.70, indirectly boosting gold prices which are priced in dollars.

On the geopolitical front, Israel has intensified military operations in Gaza, renewing investor concerns about the situation in the Middle East. Meanwhile, nuclear negotiations between the U.S. and Iran have hit an impasse, raising tensions in the Persian Gulf. As a result, investors have turned to safe-haven assets like gold. This shift was evident in the SPDR Gold Trust—the world’s largest gold ETF—which saw a 4.3-ton increase in holdings that day, a sign that institutional money may be flowing back into the metal.

On the demand side, physical buying remains strong, particularly in Asia. India’s gold imports in April surged to $4.4 billion, nearly double compared to the same time last year, partly fueled by seasonal demand during the local wedding season. At the same time, central banks in emerging markets such as China and Turkey continue to ramp up their gold reserves. The People’s Bank of China raised its official gold holdings for the sixth straight month, highlighting a broader trend of diversifying away from dollar-denominated assets.

From a technical perspective, gold has completed a double-bottom pattern around the $3,270 level and is now trading above both short- and medium-term moving averages. If prices can break above resistance at $3,350, they could potentially retest the April high of $3,386. On the downside, short-term support levels are seen at $3,290 and $3,250. Open interest in gold futures has also been climbing, indicating that bullish momentum remains intact.

Looking ahead, while Fed officials continue to stress the need to monitor inflation, markets are increasingly anticipating the start of a rate-cutting cycle as early as September. Coupled with the recent weakness in the dollar, unresolved geopolitical risks, and ongoing support from both physical buyers and central banks, gold prices are likely to stay elevated in the $3,300–$3,400 range in the near term. Investors may consider gradually building positions on pullbacks and watch closely for upcoming U.S. CPI data, which could offer more clues on the Fed’s policy direction.