Daily Brief, Nov 4 – Everything You Need to Know About Gold Today
Arslan Butt • 2 min read
Good Morning, traders.
The previous week has been one of the busiest as the markets traded Federal Reserve rate cut decision along with the better than expected labor market figures. The US dollar surged on Friday following data which revealed that US employment growth stalled less than anticipated in October, while wages and hiring increased in the previous two months.
The non-farm payrolls rose by 128,000 positions last month, whereas average hourly earnings grew 0.2% after being stable in September.
GOLD – XAU/USD – Everything You Need to Know About Gold Today
In the previous trading session, Gold prices closed at $1513.9 after placing a high of $1516.02 and a low of $1503.260. Overall the movement of gold remained bullish that day. At 17:30 GMT, average hourly earnings of the United States showed a decline of 0.2% from the expectations of 0.3% and weighed on US Dollar. However, the non-farm employment change came in at 128K, higher than expectations of 90K and supported the US Dollar. The closely watched unemployment rate from the United States remain flat at 3.6%.
At 18:45 GMT, the final manufacturing PMI dropped to 51.3 against the expectations of 51.5. The ISM Manufacturing PMI at 19:00 GMT also dropped to 48.3 from the expectations of 49.0. However, construction spending showed a growth of 0.5% from the expectations of 0.2%. ISM manufacturing prices dropped to 45.5 from expected 50.1. The total vehicle sales dropped to 16.6M from the forecast of 17.0M.
The stronger than expected labor market report about the job creation by the US economy in the prevailing US-China trade war supported the case for Fed rate cut pause in December. This non-farm payroll from the US gave strength to the greenback and weighed on Gold prices on Friday.
But due to the decrease in manufacturing PMI and average hourly earnings, the dollar suffered. The weakness in business activities gave a boost to Gold prices on Friday. Gold moved up and down amid mixed macroeconomic data from the United States.
On the other hand, the increased tensions between US & China also gave support to Gold prices on Friday when WTO authorized China to impose $3.6B in new tariffs on American goods. The World Trade Organization ruled that the duties imposed on steel and other products by the United States were illegally inflated, and that China could impose the countermeasures against US products this month.
If China takes such action, it could enhance trade tensions between the two largest economies of the world, which are trying to finalize the truce for the prevailing trade war. This news gave bullish trend to Gold prices amid rising safe-haven demand at the ending day of the week.
Gold – XAU/USD – Technical Levels
Key Trading Level: 1504.12
Gold prices are now testing the triple top level of 1,514/16. Lately, these levels have extended substantial resistance to gold bulls. Even now, the closing of doji and bearish engulfing candle on the 4-hour chart indicates high chances of a bearish reversal.
On the lower side, gold may find immediate support at 1,506 and 1,502. Whereas, the bullish breakout of 1,514 area can open further room for buyers until 1,519 and above this 1,527. NFP remains the key highlight of the day.