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US Nonfarm Payroll vs. Gold – What to Expect from the Market Today?

Happy Friday, traders.
The US dollar continued to extend its losses as bond yields fall. Is it likely to continue its bearish trend? Well, we will have to wait for one of the most awaited economic events, the US nonfarm payroll. Global investors are playing defensively today in order to save their shots for the US labor market figures.

In this update, we are going discuss the expectations of the US labor market report and how it can impact gold today. Stay tuned as these fundamentals are too good to miss!

Top Events To Watch Today

US Dollar – USD
The NFP (Nonfarm employment change) and the unemployment rate, both these economic events will be closely monitored at 13:30 (GMT). Looking at the forecast, the NFP is anticipated to be drop to 198K vs 250K in the previous month.

On Wednesday, the ADP nonfarm payroll figures also came out worse than the forecast. Typically, the NFP and ADP figures follow the same direction; in simple words, they share a positive correlation. Therefore, the Greenback is likely to be traded with a bearish sentiment until the release of the actual news.

What to expect from the NFP today?
The data for November, which will be released later today, is likely to indicate a continuation of the robust job creation, there may be less alignment when it comes to wage growth. For instance:

The Nonfarm payroll is forecast to drop from 250K to 198K. Although the figure is impressive, it’s negative when compared to the previous month’s data. The unemployment rate is likely to remain steady at 3.7%.

On the other hand, Average Hourly Earnings is expected to rise by 0.3% vs. 0.2% in October.


GOLD – XAU/USD- Ascending Triangle Pattern

On Thursday, our forex trading signal on gold closed at stop loss, but the market continued with its bullish trend. Perhaps, investors priced in the negatively forecast nonfarm payroll ahead of its release.

For the moment, you can see a tug of war between bulls and bears. The market is likely to trade in the same range of $1,244 – $1,236 until the release of labor market figures.

Gold – XAU/USD – Trading Levels
Support    Resistance
1233.58    1243.18
1229.4      1248.6
1219.8       1258.2
Key Trading Level: 1239

Gold// XAUUSD – Trading Idea
The idea is to trade the breakout, buying above $1,241 can lead the market towards $1,248. Whereas, below $1,238, gold can drop to $1,233.

All the best for today and have an awesome weekend!

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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