Source: HuiTong Finance
Gold continued its weak performance at the start of this week,
Spot Gold
during the Asian early session once fell to around
$4410/ounce
. The previously released US August employment data was significantly stronger than market expectations, with non-farm payrolls increasing by
162,000
, well above the previously expected 56,000 or so, while the unemployment rate remained at
4.1%
. The performance in the job market reinforced the market's expectation of a possible further rate hike in the US, also putting short-term pressure on gold, a non-yielding asset.
After the employment data was released, the rate market quickly adjusted its pricing. The probability of a 25 basis point rate hike at the September 16 US Federal Reserve meeting has now risen to
about 60%
, up from about 50% before the jobs report. Higher rate expectations usually mean support for the US dollar and Treasury yields, while increasing the opportunity cost of holding gold, thus gold saw a marked pullback after the non-farm data was released.
However, relying solely on employment data to judge the mid-term trend in gold has its limitations. What the market truly needs to confirm now is whether the resilience of the US economy will further transmit into inflation. If employment remains strong and rising energy prices push cost pressures higher, the US may maintain high rates for longer, putting more valuation pressure on gold in the short term; conversely, if upcoming inflation data does not heat up further, the hawkish impact of the jobs data may gradually fade.
This week's market focus has already shifted from the jobs market to inflation indicators. The US August Producer Price Index will be released on
September 10
, while the Consumer Price Index is scheduled for
September 11
. These two sets of data will be among the most important macro variables ahead of the September rate decision. According to the New York Fed's economic calendar, both PPI and CPI are set to be released this week, while the Fed's
September meeting is scheduled for September 15-16.
The market is especially focused on the transmission of energy costs into terminal inflation. If PPI and CPI beat expectations, the market may further increase bets on rate hikes, the dollar and US Treasury yields may have room to continue higher, and gold could retest $4400 or even lower. Conversely, if core inflation remains mild, the tightening expectations from the jobs data could subside, and a weaker dollar would give gold a window to rebound. The current market expectation for the August PPI year-on-year growth is about
5.2%
, up from a previous 4.7%, which means there is considerable uncertainty about the inflation data itself.
It should be noted that this gold pullback does not mean that the long-term bullish logic for gold has fundamentally changed. After surging previously, the structure of market participants has already shifted—aside from short-term speculative capital, long-term allocation demand, the physical market, and funds in the derivatives market still provide significant support. Thus, what merits more attention now is the buying power after gold's pullback from its highs, rather than simply interpreting the short-term drop as a trend reversal.
From a global asset allocation perspective, gold is still in a complicated macro environment. On one hand, rising US rate expectations, higher US Treasury yields, and a temporarily stronger dollar directly suppress gold's valuation; on the other, inflation risks from energy price increases, divergence in global rate paths, and safe-haven demand may enhance gold's allocation value. This means that in the coming period, gold may present a
"macro headwinds pressure short term, structural demand supports medium term"
pattern.
From the daily chart structure,
spot gold is currently in a clear adjustment phase; after prices pulled back to around $4410, it is already close to a key support zone. Current market momentum is weak but has not yet shown a clear mid-term trend reversal signal. If $4400 can be effectively defended, gold prices still have the possibility of an upward correction; on the upside, first watch the $4465 level, which is both a key short-term resistance and the level to break for gold to regain strength. Once gold stands firmly above $4500, it could signal a shift back to bullish sentiment, with further resistance at around $4675. Conversely, if $4400 is breached, the next support is near $4350
, with further focus on the $4260 area.
On the four-hour chart, gold remains in a weak, volatile structure in the short term. The rapid post-payrolls drop put pressure on short-term moving averages, with market momentum not yet fully recovered, and the market is more inclined to wait for inflation data to determine direction. If gold can stabilize above $4400 and break again through $4465, short-term rebound space may open; if the rebound remains capped near $4465, it indicates bears still hold the short-term initiative. If $4400 is convincingly broken, the market may further test the $4350 area, or even look for buying at lower support zones.
Overall, gold is currently facing a classic
tug-of-war between macro policy expectations and long-term allocation demand
. While jobs data has clearly heightened September rate hike expectations, the key variables that will ultimately determine market direction are still this week's upcoming PPI and CPI releases. If inflation continues to heat up, gold's short-term adjustment pressure may intensify; if inflation is lower than expected, rate hike expectations could cool again, giving gold a chance to rebound.
Editor's summary
The stronger-than-expected US August non-farm data has shifted gold’s biggest near-term pressure back to
Fed policy expectations, the US dollar, and US Treasury yields
. However, the long-term bullish logic for gold remains intact for now, as the market continues to monitor changes in inflation, energy prices, and global allocation demand. $4400 will be an important battleground for bulls and bears, while PPI and CPI may determine gold's next trend direction. At present, it's more appropriate to focus on potential breakouts at key support and resistance, while waiting for a directional choice.
Editor: Zhu Henan
