Is Gold Waiting for the Non-Farm Payrolls?

As we embark on December 4th, a Wednesday, the financial world is abuzz with varying trends in different marketsOne of the key players in the global market, gold, has been holding steady, oscillating within a significant upward channel on its four-hour chartsThe critical observation here lies in the imminent breaking point of this channel, which is poised to influence both daily and weekly trading trends.

Just last night at 11 PM, the much-anticipated job vacancies data was released, drawing considerable interest from market watchersThe numbers revealed a pronounced rebound, suggesting a tightening supply side in the United States job market, juxtaposed against a demand side that continues to riseThis is a powerful indicator of an employment market that remains robustUsing a linear projection method, one could argue that the job market is likely to persist in this hot climate, showing no signs of a substantial downturn or an impending economic recession

The implications of this data are profound; if the fear of recession diminishes, the probability of the Federal Reserve contemplating rate cuts will also wane, thereby significantly affecting macroeconomic policies and financial market expectations.

However, it is crucial to note that this analysis relies solely on one piece of data; a more comprehensive view would necessitate examining the non-farm payroll numbers, which tend to provide a clearer picture of employment trendsIn the upcoming evening, attention will turn towards the release of the small non-farm data, with market predictions expected to hover around 150,000, a drop from the previous result of 233,000. Although the potential outcome is uncertain, and predictions can be a tricky endeavor, treating this data with a neutral perspective may be wise, as its immediate implications may not be as significant as one might expect.

In the current trading environment, gold has been stuck in a consolidation phase since last week, with no breakout movements to report

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The extended horizontal trading on the four-hour charts has led to the invalidation of prior bearish patterns, while the interplay between short and long-term moving averages showcases typical sideways market behavior.

When inspecting the situation from a four-hour perspective, the current consolidation can be described as average, with only two tests against the upper and lower boundaries of the channelTherefore, high-risk strategies involving short selling or going long within this channel remain unadvisable at this moment.

Looking closer, at an hourly interval, gold retraced after Monday's opening, and the trading range has now tightened to the boundaries of 2635 to 2652. The downward trendline extending from 2665 intersects with the lower boundary of the upward channel to form a triangleThis triangulation indicates limited space remaining for the price action; should it break downwards on an hourly chart, the likelihood of a subsequent breakdown on the four-hour chart increases

Conversely, an upward break would necessitate awaiting confirmation from the four-hour indicators.

Patience, therefore, emerges as a fundamental strategyIt is ideal to await a decisive breakout from the four-hour trading range, which is essential with the long duration of this sideways marketAn optimal scenario involves a breakdown, leading to a successful cross of the daily averages below the zero-mark, providing a signal for a secondary downward movement, while the weekly outlook resumes its downward correction.

Yet, there are inherent risks in waitingA prolonged sideways market might delay conclusive breakouts, potentially leading to unfavorable entry pointsA more aggressive approach involves scouting for positions along the channel, not as a reckless move but by aligning entry points based on established patterns within the channel