Gold prices remained stable in the Asian market on Wednesday (December 4th), with spot gold currently trading around $2644.19 per ounce as the market awaits more employment data and comments from Federal Reserve Chairman Powell to further clarify the outlook for US interest rates.

Fundamentals

Main Benefit 1: Geopolitical Situation and Political Crisis Concerns

Israel threatened on Tuesday that if the ceasefire agreement with Hezbollah breaks down, Israel will launch another war against Lebanon, and stated that this time Israel's attack will go deeper and target the Lebanese state itself.

Yin Xiyue suddenly declared martial law on Tuesday evening to crack down on the "anti national forces" among his opponents. But angry lawmakers rejected the law, which is the biggest political crisis in South Korea in decades.

However, a few hours later, South Korean President Yoon Seok yeol announced on Wednesday that he would lift the martial law that had just been announced a few hours ago, losing the confrontation with the parliament, which rejected his attempts to ban political activities and censor the media.

Analysts Brian Martin and Daniel Heins from ANZ Bank Group stated in a report that the market interprets the development of the situation as a domestic political issue in South Korea, but regardless, this serves as a reminder of the rising global political risks.

French lawmakers will vote on a motion of no confidence on Wednesday, which is almost certain to overthrow Prime Minister Michel Barnier's fragile coalition government and deepen the political crisis in the eurozone's second-largest economy. Unless there is a final accident, the Barnier government will become the first French government in over 60 years to be forced to step down due to a vote of no confidence.

In addition, the Russia-Ukraine conflict continues. Local officials announced on Tuesday that Russia has launched a surprise attack on energy facilities in the Lviv and Ternopil regions of western Ukraine. Zelensky: Ukraine has conducted tests on newly developed domestically produced missiles. Ukraine will accelerate domestic missile production.

Main bullish factor 2: dovish speeches by Federal Reserve officials

Three Federal Reserve officials stated in their speeches on Tuesday that they still believe inflation is falling towards the 2% target and support further interest rate cuts in the future. However, they have not made a clear statement on whether they support or oppose a rate cut at the next interest rate meeting in two weeks. The three individuals also stated that it is too early to make a judgment on Trump's policies.

San Francisco Federal Reserve Chairman Daly and Federal Reserve Board Member Cugler believe that inflation has made progress and the job market is stable. Kugler stated that she expects the November non farm payroll report to be released on Friday, showing a rebound in employment growth from weak data affected by storms and strikes. Daley said that decision-makers need to be open-minded about the timing of interest rate cuts. Chicago Fed President Goolsby said that there needs to be a significant decrease in interest rates next year.

The latest fundamental news is still slightly bullish, alert to the possibility of a volatile upward trend in gold prices.

Main negative factors

The number of job vacancies in the United States steadily increased in October, with the largest decline in layoffs in a year and a half, indicating that the job market continues to slow down in an orderly manner.

According to the FedWatch Tool from Zhishang Institute, the market currently believes that the likelihood of the Federal Reserve cutting interest rates by 25 basis points this month is about 71%. Less than 75% of the previous day.

Technical aspect

Daily level: oscillation; MACD bonding, interweaving of moving averages, lack of clear direction in short-term trends, gold prices have been fluctuating within the range for about a week, continuously suppressed by the 55 day moving average, unable to reverse last Monday's bearish signal on the bearish bearish candlestick. KDJ's dead cross signal is also continuing, and the market is slightly inclined towards a downward oscillation in the future.

Preliminary support refers to the position near Tuesday's low of 2633.98, and attention should be paid to the support near last Thursday's low of 2620.83. If it falls below this position, it will increase the short-term bearish signal; Further support refers to the low point of 2605.13 from last week and the 38.2% retracement level near 2598.10 from the previous uptrend. Strong support refers to the position near the 100 day moving average of 2578.84.

The resistance of the upper 10 day moving average is around 2649.27, and the resistance of the Tuesday high is around 2655.47. Pay attention to the position near the 55 day moving average 2665.17. If it breaks through this resistance strongly, it will increase the short-term bullish signal.

Resistance: 2649.27; 2655.47； 2665.17； 2680.00；

Support: 2633.98; 2620.83； 2605.13； 2598.10；

Follow the future market

At present, traders' attention has shifted to the ADP employment report to be released at 21:15, as well as Powell's speech later that day. The US October factory order monthly rate and US November ISM non manufacturing PMI data to be released at 23:00 also have a significant impact, and investors need to pay attention. The highly anticipated US employment report will also be released on Friday.

This trading day will also release the Federal Reserve's economic condition brown book, which also needs to be noted.

Conclusion: The oscillation is waiting for a breakthrough, and the technical aspect is slightly inclined towards a downward oscillation.