Gold market analysis: If the price of gold breaks through $1834, it is expected to challenge the resistance level of $1856

Last week, because the number of new non-agricultural jobs in the United States was much worse than expected, the market generally abandoned the Fed’s September announcement of reducing debt purchase expectations. The dollar index continued to fall and hit a new low in nearly a month, helping the price of gold to rise to around 1830.



Last month, the United States added 235,000 jobs, far below economists' expectations, and the number of new jobs was the lowest in seven months. Economists believe that this indicates that the Fed needs to see more employment growth data before it will begin to reduce the weight. The ISM Service Industry Index fell to 61.7 from 64.1 in July. The data shows that because people are worried about the highly contagious delta virus, the demand for service industries such as catering, leisure and travel has cooled. The ISM business activity index fell to a six-month low of 60.1. The service industry, like the manufacturing industry, also faces many of the same supply and labor constraints. Inventories contracted further in August and fell to their lowest level in a year, while employment indicators in the service sector slowed slightly. The data also shows that the recent accumulation of inflationary pressures is slowing down. Therefore, the market expects that the time for the Fed's balance sheet reduction will be postponed to the end of the year or even next year, which is conducive to the performance of gold in the time window. In addition, the new crown epidemic is still lingering, especially the rapid spread of Delta virus, which has increased market concerns and provided hedging support for gold prices.

Data from the United States last Friday (September 3) showed that the number of people unable to work or work remotely at a certain point in the past four weeks due to the new crown epidemic in August rose for the first time since December. This is a worrying issue for the recovery of American employment. Signs. While cases of Delta variant virus infections surged across the United States, the proportion of those who said they did not find a job because of health concerns about the new crown epidemic also remained basically unchanged. The latest data from the Labor Bureau are part of the ongoing additional survey of households conducted by the US government, which has been published in the monthly employment report since the beginning of the epidemic. The main report shows that overall, the US employment growth slowed more than expected in August. The daily number of new coronavirus cases in the United States has climbed to a seven-month high. As the number of cases surged, economic activity slowed down. This wave of Delta variant virus epidemic is a wake-up call, indicating that the epidemic still occupies a dominant position, and it controls the future development of the global economy. The rising number of new cases in recent weeks has raised concerns that the economic recovery may stall. For this reason, the employment report may keep the Fed on hold.

Under the situation of bullish fundamentals in gold, technical and market sentiment have begun to lean towards gold bulls. If the price of gold breaks the resistance near 1834 this week, it can further test the resistance near the low of 1856 on June 4th. If it can continue to penetrate, Then it is expected to provide an opportunity to rise to the 1900 mark. The short-term need to guard against the risk of overbought callbacks, the lower 1800-1820 area is expected to become a strong support area.

Bank of China Guangdong Branch Wang Gang

Original title: Non-agricultural is far below expectations, gold climbs to a high level

Source: Bank of China