Recently, the gold market has shown significant fluctuations, influenced by multiple factors. Last Friday (November 1st), the spot gold price slightly fell by 0.2%, closing at $2,736.28 per ounce, as some investors chose to take profits at high levels. The latest data from the U.S. Department of Labor showed that non-farm payrolls increased by only 12,000 in October, below economists' forecast of 113,000, and the September increase was also revised down to 223,000. However, the unemployment rate remained at 4.1%, indicating that the labor market is still stable. Analysts believe the slowdown in employment growth is mainly due to temporary factors, such as Hurricane Helen and strikes in the aviation industry.
The market reaction to employment data was limited, allowing the dollar to rebound, while the yield on the 10-year U.S. Treasury note also stopped its decline and rose again, putting pressure on gold prices. Moreover, the ISM Manufacturing PMI index showed that U.S. manufacturing activity in October dropped to 46.5, down from 47.2 in September. However, the inflation-sensitive ISM Manufacturing Prices Paid index rose to 54.8, exceeding the expected 48.5, leading the market to expect that the Federal Reserve will not significantly cut interest rates in the short term, further suppressing gold’s trend.
From a technical perspective, gold is showing clear signs of selling pressure on the 4-hour chart, as the MACD signal line moves downward and the RSI dropped below 50 for the first time since October 10th. If the gold price undergoes further correction and falls below the $2,720 support level, it may seek support at the $2,700 psychological level. On the upside, if the gold price can break through the $2,790 high, it could challenge the $2,800 psychological level, and possibly rise further to $2,850.
This week, the gold market faces more risk factors, with the U.S. elections set to be revealed on November 6th, followed by a Federal Reserve interest rate meeting, and instability in the Middle East, with rumors of Iran's retaliatory strikes on Israel also heightening market tensions. Before these major events become clear, gold investors are opting to take profits and reduce positions to avoid potential risks.
