On Tuesday (September 3rd), there were significant fluctuations in the gold market, especially during the US trading session, where the price of gold fluctuated particularly violently. The gold price plummeted by $33 from the daily high, but then rebounded strongly, with a intraday drop of less than 0.3% as of the close.

Analysts pointed out that the yield of US treasury bond bonds declined significantly after the release of US ISM data, which became an important driving force for the rebound of gold prices.

On Tuesday, in early New York trading, spot gold fell sharply, hitting a low of $2473.20 per ounce, a drop of $33 from the intraday high of $2506.26 per ounce.

Then, the gold price rebounded sharply from its low point and briefly touched the level of $2494 per ounce, significantly reducing its intraday decline.

As of Tuesday's close, spot gold was trading at $2492.65 per ounce, down nearly 0.3% for the day.

The August manufacturing PMI released by the Institute for Supply Management (ISM) on Tuesday is still below the contraction/expansion level of the 50 line, which is a sign of economic slowdown. However, the employment sub item in the report has slightly improved. This has relieved Federal Reserve officials who have been concerned about a weak labor market.

The ISM manufacturing PMI for August rose from 46.8 to 47.2, lower than the expected 47.5.

After the ISM report was released, the yield of the US 10-year treasury bond bond fell by 8 basis points to 3.84%. Affected by the decline in US Treasury yields, gold prices rebounded after hitting a low of $2473 per ounce.

This week, with the release of JOLTS job vacancies, ADP employment changes, and non farm payroll (NFP) data, the US economic data will be very busy.

The expected job vacancies for JOLTS in the United States in July are 8.1 million, down from 8.184 million in June.

The expected increase in ADP employment in August in the United States is expected to rise from 122000 in July to 150000.

In addition, the growth rate of non farm payroll employment in the United States in August is expected to rise from 114000 to 163000, while the unemployment rate may decrease from 4.3% to 4.2%.

If the US employment report is significantly weak, speculation about a US economic recession and faster interest rate cuts will resurface, further supporting gold prices, "said analysts at Commerzbank

How to trade gold?

Analyst Christian Borjon Valencia pointed out that gold prices are trending upwards, but the shift in momentum is favorable for sellers, opening the door for gold prices to fall to $2470 per ounce. The Relative Strength Index (RSI) suggests that buyers are controlling the situation, but gold may weaken in the short term.

Valencia stated that in this situation, if the gold price remains below $2500 per ounce, the next support level will be the August 22 low of $2470 per ounce. Once it falls below the latter, the next target will be the confluence of the August 15th volatility low and the 50 day simple moving average (SMA), around the $2427-2431/ounce range.

(Daily chart of spot gold)

Valencia added that on the other hand, if the gold price rebounds and breaks through $2500 per ounce and remains above that level, the next resistance level will be the historical high of $2532 per ounce, and the next resistance level will be the $2550 per ounce mark.