On July 3rd, ahead of the crucial Thursday non-farm payrolls report, activity in the gold market was subdued with limited price swings, as participants awaited the key data for direction. The evening's release of the non-farm payrolls figures, which came in significantly weaker than anticipated, directly dampened market expectations for further Federal Reserve interest rate hikes this year, thereby providing a boost to gold prices.
This outcome was largely consistent with the guidance provided by the earlier ADP employment report, with no deviation in the directional signal. As emphasized yesterday, clear bottoming signals were evident in the shorter timeframes for gold, prompting consideration for initiating medium-term long positions. Recent price action readily shows that each time gold approaches the 3943 area, it triggers a wave of sustained recovery, with successive pullback lows also gradually rising. This indicates that bullish momentum is steadily accumulating, with the price center of gravity shifting higher. A supportive non-farm payrolls print (which was the high-probability scenario) was poised to further fuel the gold rally.
Following the data release, immediate analysis suggested that any dip below 4115 presented a buying opportunity targeting 4200. During the US session, prices reached above 4535, prompting profit-taking, with the view reiterated that any retracement above 4100 represented a chance to re-enter long positions. The Asian session today saw another powerful surge, breaking above yesterday's US session high, once again validating the bullish perspective. Given the morning's breakout pattern, several key principles need monitoring for any long positions considered in the afternoon session.
First, the overnight pullback low near 4100 and the morning's starting point of the rally at 4120 (the low of the large bullish hourly candle) serve as today's critical demarcation lines between strength and weakness. In a strong trend, lows are not breached; as long as price holds above these levels, the bullish structure remains intact.
Second, having broken above the previous session's high of 4144 in the morning, if no significant retracement occurs in the afternoon, the correction period between 1-3 PM may offer an opportunity to actively establish long positions above the 4144 level.
Third, with the current high at 4195, the initial target for any long entry would be to test this level. A decisive break above the 4195 morning high would suggest that minor subsequent pullbacks could present further buying opportunities, anticipating gold to extend its gains to new highs.
Today's Outlook: Support below is watched at 4144, which is a key level for considering long entries in the afternoon. Timing remains paramount; with an effective retracement magnitude, decisive entry at a suitable price during the 1-3 PM window is advised.
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