US nonfarm payrolls data we would tread cautiously


Ahead of today’s US nonfarm payrolls data we would tread cautiously, as the anticipation of this release is likely to prompt heightened volatility with a downside bias. In the wake of the release, a slightly better-than-expected result (or one in line with expectations) might come as a relief and consequently see some knee-jerk buying in Gold.

Gold is now below $1,500, a level we’ve been targeting for some time now. While maintain our position that we see better value in a long gold position here, our bias still favours more downside. We judge gold relative to our measure of global liquidity – we believe it can come down more, closer to $1,450. Silver has tested its 100d MA at $34.43. Given our view on gold and base metals, we view further losses as the more likely outcome. A break below $34.43 could see silver all the way back to $29/30.

Gold support is at $1,458 and $1,430. Resistance is at $1,518 and $1,550. Silver support is at $32.86 and $30.96, resistance is at $38.12 and $41.48.

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