XAU/USD Surges 1.8% to $4,316 as Dollar Stays Muted Ahead of NFP

Gold (XAU/USD) has surged 1.8% to $4,316 during the European session, maintaining strong upward momentum as the US dollar remains subdued ahead of the critical US Non-Farm Payrolls report. The precious metal continues to find support from multiple factors, including Middle East de-escalation dynamics and sustained central bank demand, with China extending its gold buying spree for a 21st consecutive month in July. Meanwhile, the Swiss franc leads among major currencies while the Canadian dollar lags, reflecting a risk-cautious market positioning. Interest rate expectations have shifted notably following this week's events, with former Fed Chair nominee Warsh's potential influence on rate policy being tempered by Trump's reminder that rate decisions rest with the full Board. Traders are closely watching the NFP data distribution, as the employment report could reshape Fed rate expectations. However, the upcoming US CPI release poses a potential risk to gold's gains, as stronger inflation data could reignite dollar strength. WTI crude oil edged down 0.4% to $76.93, adding to the mixed commodity picture heading into the jobs report.