Search Mark
Home / Market Insight

Non-Farm Payrolls Intensify Pause in Rate Hike Expectations, Gold Rebounds from Lows, Oil Surges Nearly 3%


After the release of the U.S. August employment data on Friday, the market expects the Federal Reserve to end its tightening cycle. Gold has steadily risen from multi-month lows in August, with December gold futures reaching a three-week high.  

The combined effects of OPEC+ production cuts and China’s strong economic support have driven oil prices up by nearly 3%. 

Gold >>

Gold prices steadily rebounded from multi-month lows in August, with December gold futures reaching a three-week high. After the release of the U.S. nonfarm payrolls report on Friday, gold briefly touched $1,980.20.  

While the upward momentum in gold has cooled slightly, December gold futures closed 1.18% higher than the previous Friday, ultimately settling near $1,985. 

Despite the economy creating more jobs than economists expected, wage growth fell short of expectations, and the unemployment rate surged.  

Currently, the market expects the Federal Reserve to maintain interest rates in September, with a 60% probability of a rate hike in November. Investors are closely watching upcoming U.S. data releases. 

After a high and subsequent pullback following last Friday’s nonfarm payrolls report, a small doji star pattern appeared on the daily chart for gold.  

Gold showed a minor reaction to the nonfarm data in the evening, failing to produce significant breakthroughs, and reached a high of $1,953 in the context of a favorable unemployment rate for gold. 

Technical Analysis: 

Today’s gold trading strategy suggests focusing on short positions during rebounds, with long positions considered on dips. 

  • Key resistance levels to watch in the short term are around 1948-1953. 
  • Key support levels to watch in the short term are around 1928-1923. 

WTI Crude Oil >> 

On Friday, international oil prices surged by nearly 3%, with U.S. oil surpassing the $85 per barrel mark and Brent oil reaching above $88 per barrel.  

The U.S. job market slowdown, coupled with a cooling of expectations for Fed rate hikes, has raised the possibility of a ‘soft landing’ for the U.S. economy. This optimism spilled over into the overnight U.S. stock market, boosting confidence among oil bulls. 

Furthermore, the latest release of China’s August manufacturing PMI data slightly exceeded market expectations, alleviating concerns about demand.  

Combined with a series of U.S. data releases last Monday that weighed on the U.S. dollar, investors are reconsidering whether the Fed needs to raise rates again, with the focus this week shifting to the ISM non-manufacturing PMI. 

Given the continued decline in oil inventories, the consensus on oil prices may appear somewhat conservative. The global oil market remains tight, with an estimated reduction of 2.8 million barrels per day in global inventories in August, and an expected further decrease of 2.4 million barrels per day next month. 

OPEC+’s efforts to reduce supply in recent months have dominated the spot market, while China has shown determination to boost its economy, driving oil prices higher, as China is a key engine of global crude oil consumption. 

Technical Analysis: 

Today’s short-term trading strategy suggests a focus on short positions during rebounds, with long positions considered as a secondary option during price dips. 

  • Key resistance levels to monitor in the short term are around 86.5-87.0. 
  • Key support levels to monitor in the short term are around 83.5-83.0. 

Forward-looking Statements    
This article contains “forward-looking statements” and may be identified by the use of forward-looking terminology such as “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “hope”, “intend”, “may”, “might”, “plan”, “potential”, “predict”, “should”, or “will”, or other variations thereon or comparable terminology. However, the absence of such terminology does not mean that a statement is not forward-looking. In particular, statements about the expectations, beliefs, plans, objectives, assumptions, future events, or future performance of Doo Prime will be generally assumed as forward-looking statements.     

Doo Prime has provided these forward-looking statements based on all current information available to Doo Prime and Doo Prime’s current expectations, assumptions, estimates, and projections. While Doo Prime believes these expectations, assumptions, estimations, and projections are reasonable, these forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond Doo Prime’s control. Such risks and uncertainties may cause results, performance, or achievements materially different from those expressed or implied by the forward-looking statements.     

Doo Prime does not provide any representation or warranty on the reliability, accuracy, or completeness of such statements. Doo Prime is not obliged to provide or release any updates or revisions to any forward-looking statements.    

 
Disclaimer    

While every effort has been made to ensure the accuracy of the information in this document, DOO Prime does not warrant or guarantee the accuracy, completeness or reliability of this information. DOO Prime does not accept responsibility for any losses or damages arising directly or indirectly, from the use of this document. The material contained in this document is provided solely for general information and educational purposes and is not and should not be construed as, an offer to buy or sell, or as a solicitation of an offer to buy or sell, securities, futures, options, bonds or any other relevant financial instruments or investments. Nothing in this document should be taken as making any recommendations or providing any investment or other advice with respect to the purchase, sale or other disposition of financial instruments, any related products or any other products, securities or investments. Trading involves risk and you are advised to exercise caution in relation to the report. Before making any investment decision, prospective investors should seek advice from their own financial advisers, take into account their individual financial needs and circumstances and carefully consider the risks associated with such investment decision. 

Share to

Market Insight

Gold Falls 1% as Dollar Strengthens, Oil Down Over 1%

Stronger dollar, rising US Treasury yields, and hawkish comments from Fed officials dampened market sentiment, causing spot gold to fall to a two-week low.

2024-5-30 | Market Insight

Gold Posts Three Consecutive Daily Gains, WTI Crude Rises Over 2%

Aided by a weaker dollar and safe-haven buying due to geopolitical concerns, gold prices continued to rebound, recording three consecutive daily gains.

2024-5-29 | Market Insight

Gold and Oil Prices Up 1% as Market Focuses on PCE Data

On Monday, gold prices rebounded by nearly 1%, influenced by geopolitical tensions and a weaker dollar.

2024-5-28 | Market Insight