Gold has just accelerated to $1510 before falling below $1500 without panic?

Singapore (Sept 9)  Friday's August non-farm payrolls report was mixed, reinforcing the view that economic growth is slowing and that the Federal Reserve (FED) may cut interest rates further. Although Federal Reserve Chairman Powell later played down the risk of recession, fueling a short-term rebound in the dollar, the dollar as a whole remained under pressure because of the still high probability of interest rate cuts. The dollar index showed a narrow concussion consolidation pattern on the same day, and finally closed slightly higher in the positive line, but the candle line came out of the long shadow line, indicating that the long and empty forces were hesitant.

The dollar weakened as global tensions eased this week, particularly as China and the US agreed to launch a new round of high-level trade talks in October. At the same time, dollar buying continued to weaken as the British Parliament passed a bill to prevent Johnson from leaving the European Union without an agreement.

The weakness of the dollar came as international spot gold tumbled in the last two trading days of last week, hitting a low of $1502.40 an ounce as investors temporarily sold safe assets such as gold as risk aversion cooled. Gold fell to these lows on the day after a sharp rebound to hit $1527.72 / ounce, but then fell sharply from that point again, the hour chart out of the "inverted V" reverse form.

For the time being, spot gold accelerated higher in the short term, hitting a high of $1511.90 an ounce and now trading at $1510.50 an ounce.

(spot gold daily chart source: 24K99)

Us non-farm payrolls rose 130000 in August, reported on Friday, to the lowest level since May 2019 and below market expectations. The data show that job growth in the United States was slow in August, thanks in large part to temporary hiring of census workers.

The increase was lower than Wall Street's forecast of 150000, while the unemployment rate remained as expected at 3.7 per cent. Another measure of unemployment, including discouraged and underemployed workers, rose to 7.2 per cent from 7 per cent in July, mainly due to an increase of 397000 people working part-time for economic reasons.

According to (TDS), the US non-farm payrolls report for August, excluding the federal government's temporary recruitment for the census, means that only 105000 jobs were actually added in August. Excluding hiring for the census, the number of new jobs hovered around 150000 in three and six months, still well below the 240000 in January.

"the jobs data are mixed and the market will not change its view of the rate cut later in September," said Marc Chandler, chief market strategist at Bannockburn Global Forex LLC. "

The latest CME Group FedWatch shows that interest rate futures still suggest that traders expect the Fed to cut interest rates by 25 basis points at its September 17-18 policy meeting.

After the non-farm data, Goldman Sachs adjusted its forecast for a 50 basis point cut in September and now expects a 25 basis point and 50 basis point cut of 90 per cent and 10 per cent, respectively, compared with expectations of 80 per cent and 20 per cent, respectively. However, the probability that Goldman will not cut interest rates is expected to be "less than 5 per cent".

In addition, Goldman Sachs expects the probability of the Fed cutting interest rates by 25 and 50 basis points in October to be 70 per cent and 10 per cent, respectively, compared with 60 per cent and 15 per cent, respectively, and the probability of not cutting rates by 20 per cent (previously expected to be 25 per cent).

Federal Reserve Chairman Powell (Jerome Powell) said Friday that the Fed's shift to interest rate cuts this year will help sustain U.S. economic growth and that the Fed will continue to use policy tools to support the economy.

Powell also said that neutral interest rates have fallen by 2 to 3 percentage points over the past 20 years, and that the Fed is very committed to defending the 2% inflation target. The US economy continues to perform well, global economic uncertainty has a negative impact, the macro background is low inflation, low growth and low interest rates, central banks will generally have less room for policy stimulus.

The trading day followed by a focus on Germany's adjusted trade account for July and industrial output data for July, as well as a vote by members of parliament on whether to hold an early election.

This week, the United States will release closely watched CPI and retail sales data, and the ECB (ECB) interest rate decision has received a lot of attention from market participants and is expected to trigger sharp fluctuations in the market. In addition, the Brexit, trade situation and other issues will also attract attention.

For the next trend of gold, market analysts pointed out that the current global trade situation uncertainty and geopolitical risks have not yet dissipated, so the future trend of gold is still resilient.

Edward Meir, an independent analyst at Fogstone in the US, said the recent downward revision of gold and silver (18.25,0.04,0.19 per cent) was just the right time, and the current upward targets for the two precious metals were increasingly dazzling. If gold prices (1519.082.68,0.18 per cent) continue to rise, it means the world will face more risks.

Dow Securities believes that a number of economic indicators in the United States this week corrected fears of a recession, putting pressure on gold prices to break through recent highs. The next Fed policy statement will be the key to determining whether gold can move towards the $1600 door.

On the technical side, gold held steady at $1500, facing the first important resistance level ahead of $1535 an ounce, followed by $1546 an ounce, said Jim Wyckoff, a commentator at Kitco, an analysis site. Only by overcoming these two resistance levels can we begin our journey to a six-year high.

"while we expect bond yields to remain low for some time and global stock markets to sell in the coming months, we believe the rally in gold prices is over," said Simona Gambarini, macro (Capital Economics) analyst at CIC. But bulls should not panic until gold falls below $1500. "

Spot gold was quoted at $1510.50 an ounce at 09-35 Beijing time.

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