Daily Brief, Mar 6: Trading Gold on Nonfarm Payroll Figures - Forex News by FX Leaders

Daily Brief, Mar 6: Trading Gold on Nonfarm Payroll Figures

Posted Friday, March 6, 2020 by
Arslan Butt • 2 min read

Happy Friday, fellas.

It’s going to be a big day from the trading viewpoint as investors will remain focused on the US NFP & Canadian labor market figures. Overall, the forecast for the US labor market figures remains pretty solid as the unemployment rate is likely to drop, and average hourly earnings are expected to improve. Still, the NFP itself is expected to exhibit weaker performance, which is why we may see bearish bias in the US dollar until the news release and bullish reversal in the dollar on the actual news.

Today in the Asian session, the safehaven metal was flashing green but slipped from the monthly high to $1,671.72 despite the increasing safe haven demand of US bonds and dropping Asian stocks. As we know, gold prices rose yesterday mainly due to the broad-based US dollar weakness and increasing fears of coronavirus. As the press time, the yellow metal price is currently trading at $1,678.72 and consolidates in the range between 1,667.72 – 1,681.08.

The US 10-year treasury yields fell to the record low of 0.843% down 8-pips, whereas Japan’s NIKKEI and Hong Kong’s HANG SENG both are down more than 2.0%. The reason behind all negative factors could be the market’s fear of coronavirus-led economic pessimism. Whereas, the latest numbers from the US, China, and South Korea suggest that the deadly virus continues to spread despite the governments’ struggles.

It’s worth mentioning that the US Vice President’s comments regarding the shortage of virus testing kits and Japan’s policymaker’s statements weighing on the trading sentiment.

At the USD front, the greenback failed to enjoy the risk-off market sentiment because traders are strongly expecting another rate cut from the US Federal Reserve. The Federal Reserve policymakers have refused any such aspects for their March 18 meeting, except for the latest comment coming from the New York Fed President, John Williams.

As per the latest update, the death toll from the coronavirus outbreak has risen over 3,300 so far, while the number of positive cases has risen over 96,500. Looking forward, the coronavirus headlines will be the key to watch for near-term market moves, while the pre-NFP mood of the market may weigh on the further momentum of assets.


Daily Support and Resistance
S1 1604.39
S2 1621.89
S3 1629.34
Pivot Point 1639.39
R1 1646.84
R2 1656.89
R3 1674.39

GOLD has closed another strong bullish candle on the daily timeframe, which is suggesting odds of further bullish trend continuation. Gold is currently trading at 1,677, and it’s very much likely to continue trading higher until the next target level of 1,685. Increase in cases of coronavirus and Fed rate cut decisions have heavily supported the demand for gold. Gold’s immediate support stays around 1,671; above this, bullish bias remains solid.

Today most of the focus will remain on the US nonfarm payroll figures, which will determine further trends in gold. In any case, the continuation of a bullish trend over 1,685 level can extend buying until the 1,700 level. Good luck!

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