Gold Market Analysis: Although non-agricultural in September is weak, gold is still weak

From October 4th to October 8th, gold fluctuated and declined. Since the beginning of the week, gold continued to fall at around $1,770. It once touched $1,745 on Wednesday. Under the influence of the non-agricultural report on Friday, it shot up and fell, and finally closed at the level of 1756.99. The weekly line has been overcast for two consecutive days, showing that gold is still weak.



The latest data released by the U.S. Department of Labor on Friday showed that the non-agricultural employment population in the United States unexpectedly increased by only 194,000 in September. The lowest level since March 2020, 5.1% lower than expected. The U.S. non-agricultural employment data is far below expectations, raising the market's doubts that the Fed will immediately begin to reduce the scale of debt purchases. Affected by this, the U.S. dollar index fell by about 20 points to below the 94 mark in the short-term, and then rebounded slightly from the low. Due to the frequent smashing of huge amounts of funds, spot gold turned to retreat all the gains after violently drawing 20 dollars and breaking through the 1780 mark. Some analysts said that although the employment data was weaker than expected, the September employment report may still be enough to trigger the Fed to start reducing its bond purchases. Last month, the Federal Reserve has signaled that as the economic recovery makes further progress, it tends to cancel some highly accommodative monetary policies. This week, 14 Wall Street analysts participated in Kitco's gold survey. Among the respondents, 8 analysts (57%) believe that the price of gold should rise. At the same time, five analysts (36%) believe that the price of gold will fall next week. Some analysts have said that although it is inevitable for the Fed to reduce the size of bond purchases, weak labor market data may provide some short-term momentum for gold prices, and investors will rebound. In terms of economic data, Friday will focus on retail sales in September in the United States and the initial value of the University of Michigan Consumer Confidence Index in October in the United States. In terms of central bank dynamics, many Fed officials will begin to deliver a series of speeches from the middle of the week. More importantly, the Fed will announce the minutes of the meeting on Wednesday, local time. The interest rate decision in September is biased towards the hawks and basically finalized the schedule for reducing the scale of debt purchases in November. If the hawks in the minutes of the meeting fall short of expectations, they may continue to give gold a chance to stabilize.

From a technical graphic point of view, gold may continue to trade sideways. Unless the price of gold closes above Friday's high of $1,781 per ounce, it will continue to be under pressure. Coincidentally, $1,781 is a 50-day moving average. If the price of gold closes at $1,781 or higher, it will be beneficial to those who are bullish on gold. Then we can start talking about $1,800. But for now, the market seems to have rejected this level, and the price of gold has returned to the flat level of $1,758.60 per ounce. At the same time, the $1,720 level continues to act as support. In general, the price of gold may be more inclined to the downside, especially after the failure of the bullish upside last Friday, the bearish risk is increasing.

Only personal views, not representative of the views of the organization

Source: Bank of China's official website, Bank of China Guangdong Branch Wang Gang, original title: "Although non-agricultural companies are weak in September 20,201,011, gold is still weak."