Non-Farm Payroll Preview

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(Kitco News) - Gold has found itself back in familiar territory after dropping following the FOMC announcement. The price found some good support at the green area highlighted in a previous post at the $1760/oz area. Subsequently, the price broke through the orange resistance (now support) and found itself back at the volume point of control. This is the area on the chart where most contracts have changed hands. 

 On the downside, the main levels to watch are the orange horizontal support at $1771.9/oz and the aforementioned green zone. As this is a sideways market for now it is hard to assess if the price will get that low following the binary NFP announcement. On the upside then, any clear break and close above the red shaded area would be positive for the bulls. Then the high volume node at the blue resistance line is next. Lastly, a very poor NFP reading could take the price to the black resistance line at $1873/oz. This would be a massive move and an unlikely scenario.  The result is expected to print at 450K. Lloyds bank note "For the US employment report later today, we look for an increase in nonfarm payrolls of 520k, slightly above the consensus forecast for 450k. That would be an uplift from the disappointing outturns of the last two months (366k in August and 194k in September), as the number of Covid cases has fallen back. That’s supported by the separate ADP report which showed a pickup in private sector jobs growth during the month.".  While Goldman Sachs is looking for an increase of 525k. The American investment bank said "report reflects the first full month of hiring following the expiration of federal enhanced unemployment benefits.
Our forecast also reflects improving public health, strong labour demand, and a partial education rebound as schools gradually fill positions left open at the start of the school year."

By Rajan Dhall

For Kitco News

Follow rajfx10rdhall@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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