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Weekly Summary (11/10/2021)


No-farm data was unexpected and buying side still have the trend hope.

Last week the overall operation of gold market was relatively stable and was maintaining a volatile trend in the 1745-65 range. Affected by the no-farm data on Friday night, the price rose to the high position of 1781 and then fell back to 1755. The market closed at 1756 at the end of the week which did not change the overall trend.

The employment data released by the U.S. Department of labor on Friday (October 8) showed that the non-farm employment data in September increased by 194000, the lowest so far this year. But the data in August was revised up to an increase of 366000. The unemployment rate fell to 4.8% in September, partly reflecting the decline in the size of the labor force. At the same time the average hourly wage has increased significantly. Some analysts believe that the U.S. job market is actually very fragile. At present, the Federal Reserve and the U.S. government will not slow down the stimulus policy. This employment data also puts the slightly expected interest rate increase behind the scenes. However, some people from the Federal Reserve pointed out that the Federal Reserve believes that the report is "cautious and not catastrophic. In view of the upward revision of employment in August, the Federal Reserve's code reduction plan should not change. In other words, the Federal Reserve will not modify the established measures to gradually slow down the stimulus policy because of this report.

Some clues can also be seen from the market reaction of gold prices to no-farm data. After the release of data information that the market received stimulation, briefly rose to a weekly high of position of 1781 but soon fell back and continued to maintain the existing range of sideways consolidation last week. The price behavior is more obvious and the market does not consider that the impact of poorly no-farm data on gold prices will increase. Gold prices rose sharply due to the initial bleak data but the content of the report "doesn't seem so bad on the whole". This makes the market expect that the Federal Reserve will "continue to accelerate, rather than delay and reduce the pace of monetary policy", leading to the decline of gold prices. However, if the employment report next month is still poor, it may change this expectation.

In addition, other U.S. economic data are more optimistic. The ISM non-manufacturing activity index rose slightly to 61.9 in September from 61.7 in August. A reading higher than 50 indicates the expansion of the service industry, which accounts for more than two-thirds of U.S. economic activity. Economists previously predicted that the index is expected to drop to 60 in September. The growth of private jobs in the United States in September exceeded expectations. As the new crown infection began to fall, restaurants began to decline And other high contact enterprises increased recruitment. The ADP national employment report showed that private employment increased by 568000 last month, higher than the increase of 428000 previously expected by analysts. Last week, the number of initial jobless claims in the United States recorded the largest decline in three months, indicating that the labor market recovery is recovering after the recent slowdown when the virus infection began to subside. As of the week of October 2, the number of initial claims for unemployment benefits decreased by 38000 to 326000 after seasonal adjustment, the largest decline since the end of June.

Generally speaking, although the no-farm data has a short stimulus to the market but on the whole, it is basically optimistic about the gold price. There is also obvious strong support in the 1720-45 range and there is still some market hope for bulls. In this week, the main line can be considered to be short-term light positions and long and short transactions above 1720.

Technical analysis: The context of brin belt is clear

Last week, the price trend was relatively clear in the brin belt space. The price reversed after touching the lower track line and decreased after touching the upper track line, basically running up and down in the shock range in the brin channel. The difference is that the impact of no-farm data on Friday night caused the slightly narrowed brin exposure to expand, the price rose and fell forming a reverse V-shaped shape. It remained stable in the late trading , the main line of the following behaviors closed at 1756. At present, although the exposure is large, it is basically affected by the non-agricultural price stimulus. After the opening on Monday the price tends to be stable which may lead the exposure to be stable again.

MACD shows that the rising kinetic energy is gradually exhausted after the non-agricultural price falls, but due to the influence of inertia, the moving average is still above the zero axis. In view of the great impact of non-agricultural data on indicators, it is unable to determine how to guide new market conditions.

Important data of this week:

Wednesday: 20:30 US September CPI annual rate not seasonally adjusted (%)

Thursday: 20:30 initial jobless claims in the United States for the week ended October 9 (10000)

Friday: 20:30 US retail sales rate in September (%)


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