March non-farm payroll data is about to be released, and the Federal Reserve is at a critical crossroads.

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Source: Huitong Finance

At the time when the March Non-Farm Payrolls employment data is released, the market is in a critical moment.

The Federal Reserve is re-evaluating its dual mandate. In early 2026, policymakers are focusing on cooling in the labor market, while after the U.S.-Iran conflict caused the Strait of Hormuz to be shut, energy prices surged sharply, forcing the Federal Reserve to shift its attention back to inflation.

As energy costs may continue to be embedded at higher prices in the economy, traders are closely watching changes in rate-probability ahead of the release of the Federal Open Market Committee meeting minutes next week.

Because most markets are closed for the Easter holiday on Friday (April 3), the market’s true reaction to the Non-Farm data may not fully emerge until Monday, giving investors a longer weekend to digest how employment data could affect Fed policy, and the potential impact on key assets such as gold.

How is gold performing technically before the Non-Farm data is released?

Gold is currently in a corrective pattern of an ABC flag consolidation on the daily chart, and it has already tested the 50% Fibonacci retracement level of the rally from $5,420 to $4,100 before the Non-Farm data release. After finding a bottom near the 100% Fibonacci extension area, the daily RSI rebounded from the oversold zone. The prior move that broke below the low of Wave A could be viewed as a false breakout. Although the gold price briefly broke above $4,800 and moved above the 50% Fibonacci retracement level today, the dollar’s strength—driven by Trump’s tough remarks on Iran and the UAE pushing for the Strait of Hormuz to reopen—has put renewed pressure on gold.

From a technical perspective, momentum failed to return to this key level at 50 that distinguishes bullish from bearish sentiment.

Therefore, if the March Non-Farm data disappoints, gold may find support, because the probability of the Fed raising rates could decline. The bulls need a decisive breakout above the $4,850 50% Fibonacci retracement level to further challenge $4,920. Conversely, if employment data is strong and reinforces the Fed’s hawkish stance, the gold price could continue to move lower. The gold price has briefly fallen below the 38.2% retracement level of the prior downswing. If it breaks down structurally below $4,400, it could open the door to a deeper pullback, with targets pointing to $4,200.

What are market expectations for the March jobs report?

The market broadly expects that March Non-Farm Payrolls will add 60k jobs, rebounding from February’s decrease of 92k.

Barclays analysts expect the Non-Farm and private-sector hiring gains to be more conservative, at only 50k, because signs of weakness in the U.S. job market have emerged, and hiring in the government sector is essentially flat. This rebound mainly came from the end of strikes in California and Hawaii’s healthcare industry. If that factor is excluded, the underlying job growth is broadly in line with the 1–2 month average.

Meanwhile, the unemployment rate is expected to edge down to 4.4%, though the Chicago Fed’s advanced labor market indicators model suggests unemployment could be slightly higher, at 4.46%. The average hourly earnings figure, which is more directly tied to inflation, is expected to rise 0.3% month-over-month and 3.7% year-over-year. Average weekly hours remain unchanged at 34.3 hours.

How have interest-rate expectations changed ahead of the FOMC meeting minutes?

At present, market pricing shows a 70% probability that the Federal Reserve will keep rates unchanged this year, a 20% probability of a rate hike, though some voices already predict that rate cuts could occur.

Because the Federal Reserve’s interpretation of employment data is rapidly shifting, Fed Chair Powell has hinted that the current level of near-zero net private-sector job growth may be the balanced state the economy needs right now.

Driven by the energy shock in the Middle East, the Federal Reserve has been forced to prioritize its inflation mandate to prevent demand destruction and a potential recession. Policymakers are divided between stabilizing policy and further easing, making next week’s FOMC meeting minutes and this Friday’s Non-Farm data crucial for judging whether the Fed will be forced to tighten or ease policy.

In summary, the March Non-Farm employment data will be released against a backdrop in which the Fed’s dual mandate faces a severe test. Although employment growth expectations are relatively moderate, the continued run of energy prices at elevated levels has significantly changed the Fed’s policy priority order. The gold market is currently in a technical consolidation phase; the strength or weakness of the Non-Farm data will directly affect market expectations for the Fed’s rate path, triggering sharp volatility in gold prices.

Investors need to closely watch the market reaction after the employment data is released, as well as the latest assessment by Fed officials in next week’s FOMC meeting minutes of the current economic situation, in order to seize subsequent investment opportunities and manage risks.

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Editor-in-charge: Zhu Huanan