Original title: Hold your breath to wait for the non-agricultural storm to strike!Please re-explode the table, the dollar and gold unexpectedly fall. Source: China Metal Net
Thursday (September 2),Gold priceRetreated in a range of shocks, as investors ignored the weakness of the US dollar and closed their positions. The focus is still on Friday’s non-agricultural employment data, which may determine the Fed’s balance sheet reduction strategy.
In late trading in the US market, spot gold closed at US$1809.59 per ounce, down US$4.06 or 0.22%. The lowest intraday touched US$1804.69 per ounce and the highest touched US$1817.06 per ounce.
COMEX December gold futures closed down 0.3%, at 1811.50 US dollars per ounce.
Phillip Streible, chief market strategist at Blue Line Futures, said, “The gold market is currently consolidating and will not care about anything else until the employment data is released.”
But Streible added, “If the U.S. dollar depreciates significantly, gold may usher in some form of buying.”
Gold investors don’t seem to notice the dollar’s fall. The price of gold usually rises as the dollar weakens, because a fall in the dollar makes gold cheaper for people who hold other currencies.
Market participants also evaluated the data. The data showed that despite the surge in the number of new coronary pneumonia infections, the number of Americans who applied for unemployment benefits decreased last week.
At the Jackson Hole annual economic policy seminar, Fed Chairman Powell said that the recovery of the labor market will determine when the Fed will start to slow down asset purchases.
Gold is highly sensitive to any interest rate drop, which reduces the opportunity cost of holding non-yielding gold.
Michael Hewson, chief market analyst at CMC Markets UK, said: “The price of gold needs to work hard to reach the high of about US$1,830 hit in August, but for now, the price of gold may not fluctuate much before the non-agricultural employment data is released. “
Reuters survey shows that the US Department of Labor’s August non-agricultural employment report is expected to show 728,000 new jobs.
Fundamental bullish factors
1. The U.S. dollar index, which measures the exchange rate of the U.S. dollar against six currencies, closed at 92.22, down 0.30%, and hit 92.21. The dollar’s fall has supported the dollar-denominated gold.
2. The ADP employment population in the United States only increased by 374,000 in August, which was far lower than the expected increase of 613,000. The previous value was revised to an increase of 326,000 and the initial value was 330,000. Weak data often weighs on the U.S. dollar and boosts dollar-denominated gold.
3. Fed Chairman Powell delivered a speech at the Jackson Hole Economic Conference on Friday, stating that he may cut its asset purchase plan “this year”, but did not imply when the Fed plans to cut asset purchases, and hinted that the Fed will continue to raise interest rates when it finally decides to raise interest rates. cautious. The market believes that Powell is a pigeon, which boosted the performance of gold.
Fundamental negative factors
1. The number of initial claims for unemployment benefits in the United States dropped to the lowest level since March 2020, which is another sign that the labor market is recovering from the era of the new crown epidemic. As of the week of August 28, the number of initial claims for unemployment benefits was 340,000, an estimated 345,000. Strong data tends to boost the dollar and put pressure on dollar-denominated gold.
2. Investors began to turn their attention to Friday’s U.S. non-farm payrolls report, which will provide more information on the Fed’s possible policy path. Non-agricultural employment is expected to increase by 728,000 in August, and the unemployment rate is expected to fall from 5.4% to 5.2%. The strong non-agricultural report will raise the Fed’s expectations of tightening policy, putting pressure on gold.
Outlook
1. Michael Hewson, chief market analyst at CMC Markets UK, said: “Since late last week, we have seen a slight weakening of the U.S. dollar, which has helped push up the price of gold. At present, gold is still largely’buying on dips. In the case of entering, the price of gold has successfully held above US$1,800.” “The price of gold needs to work hard to rise to the high point seen in August, which is about US$1830, but for now, it may be possible before the non-agricultural employment data is released. There won’t be much fluctuation.”
2. Kinesis analyst Carlo Alberto De Casa said in a report, “The price of gold has encountered resistance in the past 15 days, and the key level is $1,820.”
3. Bloomberg’s latest research shows that due to the flood of global liquidity, the price of gold is underestimated, and gold may still rise to US$2,000 in the second half of this year. Mike McGlone, senior commodity strategist at Bloomberg, said that in the metals sector, gold appears to be the most promising asset compared to other assets such as copper and aluminum. He said in the report: “Copper and aluminum prices are hitting the upper limit, but we believe that gold is a discount bull market, and fundamental support has improved.”
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