Trading Ideas for Gold This Week

٤ سبتمبر ٢٠٢٣

Daily Economic Observation, September 4th, 2023:

Trading Ideas for Gold This Week:

Last Friday, despite the non-farm payroll report matching a "soft landing" trajectory, the USD Index rebounded quickly from its intraday low due to the hawkish stance hinted by Cleveland Fed President Mester, suggesting further tightening. US bond yields, after the non-farm report, touched a three-week low, but also subsequently rallied.

The most noteworthy aspect of the non-farm data was the significant rise in the unemployment rate to 3.8%. This surge is partly due to an increase in the labor participation rate, meaning more people are actively seeking employment but not finding it, leading to an abnormal rise in unemployment. Even excluding the impact of the increased labor participation rate, the rise in the unemployment rate is significant. Considering several recent US employment data, the US labor market is weakening, but it hasn't reached levels that cause recession concerns.

Gold:Economic data that might drive the direction of spot gold prices this week:
This Thursday: Initial jobless claims for the week ending September 2nd in the US (previous value 228,000). If the number of initial jobless claims is higher than the previous value, it indicates that the US labor market is continuing to slow down. The expectation for a rate hike in September might be adjusted downwards again, which in the short term is bullish for gold prices.

Technical Resistance and Support Levels:Gold prices are likely bullish if they stabilize above $1946. Should they drop below $1946, the outlook remains bearish. Resistance levels to consider: $1946, $1953, $1960. Support levels to consider: $1934, $1927, $1918.