On Thursday (December 5th), spot gold fluctuated narrowly in the Asian market, with gold currently trading around $2647.58 per ounce. Investors are waiting for the release of US non farm payroll data on Friday to seek more clues about the Federal Reserve's monetary policy path.

After the release of the US non farm payroll report on Friday, November inflation data will be released next week.

Fundamentals

Main benefits:

1. The November ADP employment data in the United States was slightly weaker than market expectations, with an increase of 146000 jobs, and economists had previously predicted an increase of 150000 jobs. The growth rate for October has been revised down to 184000 units, compared to the previous value of 233000 units.

2. ISM reported that the US Non Manufacturing Purchasing Managers' Index (PMI) rose sharply to 56.0 in October, the highest since August 2022, and then fell to 52.1 in November. Economists previously predicted that the service sector PMI for November would drop to 55.5. The employment index of the service industry fell from 53.0 in October to 51.5.

3. French opposition lawmakers overthrew the government on Wednesday, further plunging the EU's second-largest economic power into a political crisis that threatens the country's ability to legislate and control a huge budget deficit. With the weakening of presidential power, France may not have a stable government or a 2025 budget by the end of this year, despite the constitution allowing for special measures to avoid a US style government shutdown. The political turmoil in France will further weaken the European Union, which is already struggling due to internal strife within the German coalition government.

4. On Thursday, the South Korean National Assembly officially proposed a motion to impeach President Yoon Seok yeol for the failed implementation of martial law. However, Yoon Seok yeol's political party vowed to oppose this move, casting doubt on the impeachment process. The Congress may vote on the bill as early as Friday.

5. The market's expectations for the Federal Reserve's December interest rate cut have risen, with interest rate futures showing a probability of 79.5% at one point, but it has now fallen back to around 73.8%.

6. The rebound of US Treasury yields was hindered on Wednesday. The 10-year Treasury yield rose 1.5% earlier in the session, reaching a new high of 4.286% in a week, but then gave up all the gains and closed down nearly 1% to 4.182%. Technical indicators showed an increase in short-term downside risk, leaning towards supporting gold prices.

7. Bank of England Governor Bailey reiterated that there may be gradual interest rate cuts next year, and added that the process of inflation decline is deeply rooted. Bailey said, "There is still a way to go because although inflation fell to the target level in the summer, we have been saying recently... we may return to a level slightly above the target. Bailey said that the Bank of England expects to cut interest rates four times next year

Main negative factors

1. Federal Reserve Chairman Powell said on Wednesday that the current economy is stronger than expected when the Fed began cutting interest rates in September, and seems to be sending a signal of support for slowing down the pace of interest rate cuts in the future. The economic situation in the United States is very good, there is no reason not to continue it... The downside risk in the labor market seems to have decreased, economic growth is definitely stronger than we imagined, and inflation rates are slightly higher, "Powell said." So the good news is that we can be more cautious when we try to find a neutral level

2. The Federal Reserve stated in the Beige Book that since early October, economic activity in most parts of the United States has slightly expanded, employment growth has been "sluggish," inflation has risen slightly, and businesses are optimistic about the future.

3. After analyzing statements from Trump advisers and interviews with several close contacts, Reuters believes that his advisory team is publicly or privately proposing to end the Ukraine war, which could lead to Ukraine ceding large territories to Russia in the foreseeable future.

4. A source familiar with the talks said on Wednesday local time that the Middle East envoy selected by US President elect Trump met with the prime ministers of Qatar and Israel to initiate Trump's diplomatic efforts to reach a ceasefire and hostage release agreement in Gaza before his inauguration on January 20th. Sources say that the incoming Middle East envoy Steve Witkoff visited Qatar and Israel at the end of November. Sources added that these meetings indicate that Qatar has resumed its role as a key mediator after suspending it last month. Hamas negotiators may return to the Qatari capital Doha to facilitate a new round of negotiations.

The overall fundamental news is mixed, and we will continue to pay attention to news related to US data, geopolitical situation, and political situation. Relatively speaking, short-term negative and potential negative factors are slightly stronger than positive factors.

Technical aspect

Daily level: Maintain volatility, indicator signals are vague, and there is not much difference from the previous day. Pay attention to the breakthrough situation in the volatile range of 2620.83-2666.16 in the past week. Considering the bearish signal of the bearish candlestick on November 25th, the 55 day moving average is also around 2666.38. Before breaking through the 55 day moving average, the market is slightly inclined towards a downward oscillation.

4-hour level: oscillation; Bollinger Bands close, pay attention to the breakout situation in the area of Bollinger Bands tracks 2628.86-2657.16. Given the slight dead cross trend of KDJ, it is necessary to be cautious of the possibility of a downward shock; Of course, KDJ is also in the middle position, and the signal is still relatively weak.

Resistance: 2651.46; 2657.13； 2666.38； 2676.93； 2688.64； 2700.00；

Support: 2638.79; 2632.45； 2628.86； 2620.83； 2605.13； 2598.10；

Economic Calendar 

On this trading day, the number of layoffs by challenger companies in the United States for November, the number of initial jobless claims for the week ending November 30th, and the US trade account for October will be released. Investors need to pay attention. In addition, Richmond Fed Chairman Barkin will deliver a speech on the trading day, and investors need to pay attention.

Conclusion: The short-term bias remains volatile. Pay attention to the US economic data and news related to the geopolitical situation.