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Fundamentals

During Friday's (December 8th) Asian session, spot gold pulled up slightly, and it is now trading at $2032. Yesterday's gold movements were relatively stable, except for the rise to $2024 at the beginning of the U.S. session, followed by a rapid decline to as low as $2020. Investors shorting gold at the upper edge of the trading range could achieve the first target. Yesterday's data release didn't have much impact on the market movement as the U.S. initial jobless claims data was neutral. After the last plunge, the market has been consolidating for a few days. It's waiting for tonight's non-farm payrolls data. Before the data release, there may be a wave of speculation. It's a "buy the rumor, sell the news" strategy. We don't recommend investors join the speculation before the non-farm payrolls data release, because the non-farm payrolls may give more guidance on monetary policy. Whether it will strengthen or disappoint the current optimistic expectations, the market trend won't end in a day. We have a lot of opportunities to enter the market, so there is no need to gamble. Just follow the trend.

Data: Last week, the number of initial jobless claims in the U.S. was 220,000, while it was expected to be 220,000 and the previous data was 219,000 (revised up from 218,000). The four-week average was 220,750 and the previous reading was revised from 220,000 to 220,250. For the week of November 25th, the number of continuing jobless claims reached 1.861 million, compared to an expected number of 1.91 million, and the previous reading was revised from 1.927 million to 1.925 million. The number of U.S. Challenger Job Cuts was 45,510 in November, and the previous reading was 36,836. The November Challenger Job Cuts ascended 23.55% MoM and dropped 40.8% YoY, compared with the 22.38% MoM decline and 8.8% YoY increase last month.

Today's focus: U.S. non-farm payrolls data, the employment participation rate in November, and the Michigan Consumer Sentiment Index.

Technical Analysis

Gold oscillated narrowly in the Asian session yesterday. It appreciated to 2040 at the beginning of the U.S. session and then plummeted quickly to 2020 before rebounding to the 5-day SMA. Finally, the daily chart was closed with a small doji star, and gold gained the second-consecutive gain at lows, showing a sign of stabilizing. Investors must be cautious about shorting gold, and chasing the bears is not recommended. In contrast, investors should go short after a rebound, with the focus on the resistance near 2052 above. As the non-farm payrolls will be announced tonight, larger oscillations may appear and investors should keep watching in the Asian session and wait for the data release. Today, the trading range will start from 2010 to 2052, and aggressive investors should buy low and sell high in this range.  

Trading Recommendations

Trading direction: Short

Entry price: 2052

Target price: 2010

Stop loss: 2055

Support: 2017.000/2010.000

Resistance: 2041.000/2052.000