April 6th is still a crucial week ahead, as it is a short-term and long-term battle; The debate over the impact between the US March non farm payroll data and the Biden administration's new infrastructure plan. The surge in gold is due to market expectations that Biden's $3 trillion new infrastructure plan will trigger a new round of inflation, benefiting safe haven assets and gold. However, despite last Friday's vacation, the non farm payroll data for March in the United States was still released as usual. Data shows that the non farm payroll in the United States increased by 916000 in March, the largest increase since August last year, far exceeding the expected increase of 660000. Last month, it increased by 379000, significantly bearish on gold. So, data is short-term bearish on gold, while fundamentals are long-term bullish on gold. This is a battle between the short and long term, and although the direction remains bullish, the selection of entry points is crucial.
Analysis of today's trend of gold:
On Monday, the yield of 10-year US treasury bond bonds continued the rise of last Friday. The gold price (1729.82, 1.02, 0.06%) fell slightly, ending a three-day rise. The far stronger than expected US non farm employment data boosted optimism about further inflation and drove up longer-term interest rates, weakening the yield free gold. The bright employment data has increased expectations for a strong recovery of the US economy from the pandemic, fueling speculation about rising US inflation. This in turn has raised doubts about whether the Federal Reserve will maintain ultra-low interest rates for a longer period of time, pushing the benchmark 10-year US government bond yield back to the threshold of 1.70% or above, further putting pressure on gold prices. Investors should act cautiously and wait for further selling actions to confirm the end of last week's rebound trend and the return of gold prices to the downward trend before the rebound.
On last Friday's non farm night, gold was closed for a day due to the influence of Good Friday. However, today's gold opened without being affected by non farm data and did not show a short opening high or short opening low. Instead, it operated within small fluctuations. The Asian and European markets were under pressure at the high point of 1730 in the early morning, with a back test of one wave reaching 1721. Subsequently, the European market has been repeatedly consolidating around the 1721-1730 range, with the highest rise in the US market reaching the line of 1733.39. So far, the fluctuation is only 12 US dollars. So, how should today's gold be viewed?
From a technical perspective, gold rose sharply in two consecutive days last week, with a clear bottom pattern on the daily chart. The deep V flipped and entered the consolidation center before this point, and the bulls were very strong. Today, gold maintained a small horizontal consolidation at the top. Due to the inability of the European market to strengthen and continue the rebound and upward trend of the previous day, there is a possibility for the US market to rebound and then rise again. Therefore, it is not urgent to arrange the low long position. First, focus on the support of the 1720-1718 line. If it can remain unbroken before 23:00, it is possible to maintain a long position above this position. The upper position is temporarily under pressure from 1736. Overall, it is recommended to focus on a pullback and short position in gold operations today, supplemented by a rebound and short position. The upper position should focus on 1736-1736. 8 lines of resistance, with a focus on short-term support from 1718-1720.