Gold Market Analysis: Volatility Patterns Amid Structural Changes in the Labor Market

Key insights

The recent U.S. employment data released by ADP revealed huge changes in the labor market: although the average number of weekly layoffs fell, the new hiring rate increased to 4.4%, indicating that the hiring logic shifted from “increasing demand” to “replacing departing employees.” Behind this structural shift is the accelerated aging of the workforce – 36% of employees are now 55 and older. At the same time, giants such as Amazon announced the highest layoff plans in more than 20 years in October, exacerbating concerns about a weak labor market, with about 55% of employed people worried about the risk of unemployment.

After the data was released, spot gold briefly rose to $4,080 per ounce, reflecting rising risk aversion amid concerns about the economic outlook. However, a single data is not enough to support a trend reversal, and investors should be wary of market fluctuations before the non-agricultural data is released.

Technical analysis: Gold shows a “false breakthrough, low test, rebound” pattern on the technical chart:

Main interval: The main interval is between 4150-4000. Trend reversal requires the price to actually stay above 4047-50; otherwise, the overall pattern will still show a downward trend.

Momentum: Although ADP data gave buyers a brief boost, the 4-hour technical structure still shows sellers are in control. The “sell on the rallies” strategy has had a high success rate since Monday, proving the effectiveness of trading with the trend.

Timing: Nonfarm payrolls data will be released on Thursday, which could represent a mid-term market guidance decision. Randomly switching to bullish positions based on a single data point is not recommended. Trading strategy: short-term operation

Short entry opportunity: Open a short position based on the resistance area 4100-4120, set the stop loss order above 4130, and target the 4050-4030 area.

Defend the buy position: If the price rebounds to the support area 4000-3995, you can try to open a small buy position with the stop loss set at 3990 and the target set at 4020-4030. If there is a breakout, look for exit at 4050.

medium term strategy

Maintain the mid- to long-term short position plan in the 4147-50 area as a counter-trend defensive strategy.

Risk warning: Before the release of non-farm payrolls data, market sentiment will be negatively affected; avoid chasing highs and lows.

Major investment funds may use data to create fake hacks; therefore, the risk must be strictly controlled. In a structural bear market, “selling first, selling second” is still the main strategy; patiently wait for key levels to confirm the trend.

The market is always in a state of dynamic equilibrium; only by following the laws of trends can we move forward steadily amid fluctuations.

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