Gold Price Analysis: Gold May Test 1830/1835, Ahead Of NFP Next.

2021年8月28日

Fundamental View

What happened the last week?

Last week Powell mentioned FED might start mounting back its purchase program this year. Though he didn't mention any specific timeline, investors took it positively for commodities price.

IF FED starts its asset purchasing program again, it means the surge in inflation may fade over time. It is a good sign for commodities price, not US dollar. Falling rates, money supply equals inflation, and stagflation is the best environment for buying Gold.

What about the next week?

Next week there are some biggest market mover data. Wednesday, ADP and ISM manufacturing reports will release. Both reports are important for the gold price movement. ADP is directly related to the NFP report as well.

Next Week Market Mover Data


ADP Non-Farm Employment Change

ISM Manufacturing PMI

Average Hourly Earnings

NFP

Unemployment Rate

ISM Services PMI

ADP expected positive for the next week. So, if the reports can fulfill market expectations, we may see gold prices falling again. But, technically, there is no obstacle or resistance to test the 1830/1835 price zone.

On Monday, most market players don't trade unless there might have big macro-economic are to be published. So, on Monday market normally follow technical analysis more than fundamental analysis. From this perception, there is a big chance gold mat test 1830/1835 price zone before the ADP report release.

If ADP meets the market expectation on Wednesday, Gold may drop from the immediate resistance 1830/1835 price zone. On the other hand, if ADP falls, the gold price may break above the 1835 price zone, and the upside target is the 1850/55 price zone.

On Friday, US job market and ISM service PMI reports will release. We all know, US job market report is the biggest macro-economic data for the US dollar. Average hourly earnings, ISM manufacturing PMI and NFP are expected negative than the previous report. Only the unemployment report is expected positive.

Most of the time, the ADP report follows NFP. But, nut, this trading week seems a bit different. ADP is expecting a bit higher than the previous report, but NFP is expecting a negative. In my view, the reason is, last month's NFP report came too high. So, it is hard to beat the last month's report.
This week NFP is expecting 750Knew jobs to be added to the labor market; last month, NFP added 943K jobs. So, after Wednesday, we can assume what will be the NFP report.

Normally, if we see NFP and average hourly earnings rise, Gold will drop, there is no doubt. But if these two reports print negative than forecast, we think for 1900 price zone this week. So. Let's see what happens with the US labor market reports.


Technical View

In the H4 chart, 1773 is the immediate support, and breaking above 1805 has confirmed short term down-trend channel has broken. And 1830/35 is identifying as immediate resistance from the current gold price.
That means, technically market is in an uptrend for the short term. Because, in the higher time frame, we have another descending trend line nearly 1855/1865 price zone. So, it has a real possibility next week market may test the 1830/1835 price zone easily unless there doesn't happen unexpectedly.

After breaking above the 1835 price zone, our 2n upside target is the 1850/1855 price zone. 1855/1865 may play as a reversal area unless the US job market report print worse than the last report. I will suggest not trade Gold at the 1855/1865 price one unless we see a big fall in our job market reports.

If we see market breaks and stable above minimum H4 candle above 1865 price zone, we may go for another buy till 1900 price zone. But I expect 1855/1865 will play a reversal zone, and Gold may go to the downward correction until the 1805 price zone again. So, let's see what happens.