According to data from the US Department of Labor, the slowdown in non-farm payroll growth in the United States in October exceeded expectations, with the unemployment rate reaching a nearly two-year high. Non-farm employment increased by 150,000, which was lower than the expected 180,000. Initial jobless claims also rose to 231,000, higher than economists' forecast of 220,000. The report also showed that continuing claims for unemployment benefits reached a two-year high. Some analysts believe that the labor market is slowing down due to rising interest rates suppressing demand. Following the release of the data, gold prices rose and returned to USD2,000.

Market expectations for further interest rate hikes by the Federal Reserve have decreased, with some even believing that the rate-hiking cycle may be ending. Personally, I believe that if US interest rates peak and the expected magnitude of adjustment is greater than in other countries, the US dollar may face downward pressure, which would be beneficial for gold. The minutes of the Federal Reserve's meeting released on the 22nd did not have a significant impact on gold prices. In the previous meeting, the Federal Reserve had paused interest rate hikes for two consecutive times. Federal Reserve officials concluded that inflation is steadily declining, and they are closely monitoring upcoming data to ensure that the pace of price increases continues to moderate, aiming for the 2% target. However, most economists believe that the Federal Reserve has completed its rate hikes, which is a fundamental bullish factor for the gold market.

From a technical standpoint, despite expectations that US interest rates may decline to a two-month low, gold has not yet effectively surpassed USD2,000. As of 22nd November, it retraced after testing USD2,007, indicating that the market is still patiently waiting for more positive fundamental news to sustain the upward trend. Looking at the daily chart of gold, structurally, the bullish trend has not changed. However, whether the gold bulls can continue depends on the acceleration of the upward movement on the daily chart. If it can break through the USD2,008 level, then the price of gold will move towards the resistance of the monthly moving average at USD2,078. But it should be noted that it is currently being resisted at the USD2,009 level, and there may be a risk of a pullback in the short term, so it is not advisable to chase the price too high at this stage. As for the significant support levels below, they are around USD1,970 and USD1,945. Investors may consider buying on dips, which has relatively lower risk. As long as USD1,900 is not breached, the overall upward trend remains bullish.

Hugo Leong

Gold Analyst of Hantec Group