Gold Prices Eye CPI As Non Farm Payrolls Miss , Rising Wages Complicate Fed Outlook

1. Gold Prices Eye CPI As Non-farm
Payrolls Miss, Rising Wages
Complicate Fed Outlook

2. Points To Be Discussed Today:
• Gold Fundamental Forecast – Bearish
• Gold Vs. Us Dollar And 10-year Treasury Yield
• Trading Signal For Gold
• Gold Down, Fed Expected To Begin Asset Tapering
On Schedule
• XAU/USD Faces A Wall Of Resistances Around
$1765
• Gold Price: Key Levels To Watch
• GOLD (XAUUSD):Why So Slow?! Technical Outlook

3. Gold Fundamental Forecast - Bearish
• Gold prices marked time this past week, but
outlook remains bearish.
• Non-farm payrolls miss saw higher wages,
which may bolster inflation.
• XAU/USD eyeing US CPI data as Fed may start
tapering in November.
• Anti-fiat gold pricestraded relatively flat this
past week, but the fundamental outlook for
XAU/USD remains tilted to the downside.

4. Non-farm Payrolls Report
• At the end of the day, September’s non-farm
payrolls report probably does little to derail
Federal Reserve tapering expectations.
• Investors are anticipating the central bank to
begin the process at the November rate
decision.
• While the world’s largest economy only added
194k jobs last month, there are signs that the
labor market is facing supply-side issues.

5. The Fed’s Outlook
• The unemployment rate unexpectedly declined to
4.8% from 5.2%. Economists were anticipating a
drop to 5.1%.
• This might have been partially explained by the
decline in the labor force participation rate to
61.6% from 61.7% prior.
• Ultimately, this appears to be complicating the
Fed’s outlook.
• Average hourly earnings continued rising,
climbing 4.6% y/y versus 4.3% prior.

6. The Fed’s Target May Keep The Door
Open
• Softer-than-anticipated payroll gains could slow the pace
of economic recovery, but higher wages may continue
bolstering inflation.
• The latter might be what is keeping prospects of Fed
tapering intact.
• On the chart below, I have compared wages versus core
inflation.
• In fact, the US will release the latest inflation figures this
coming week.
• The headline and core rate are expected to clock in at 5.3%
and 4.0% y/y respectively for September.
• Ongoing elevated readings above the Fed’s target may keep
the door open to Fed lose policy unwinding.

7. US Average Hourly Earnings Vs. Core
CPI

8. Combination Of Rising Treasury Yields
• Ultimately, these forces may bode ill for the
non-interest-bearing yellow metal.
• A combination of rising Treasury yields, and a
stronger US Dollar, may keep pressuring gold
prices.
• Or at the very least, cap upside XAU/USD
potential. On the chart below, gold can be
seen tending to inversely follow bond yields
and the direction of the US Dollar as of late.

9. Gold Vs. Us Dollar And 10-year
Treasury Yield

10. Trading Signal For Gold

11. Gold Down, Fed Expected To Begin
Asset Tapering On Schedule
• Gold was down on Monday morning in Asia, as
the U.S. Federal Reserve is expected to begin
asset tapering as per its timeline despite the
disappointing data in the latest U.S. jobs report.
• Gold futures edged down 0.14% to $1,754.95 by
12:14 AM ET (4:14 AM GMT), with the yellow
metal hitting a two-week high on Friday after the
release of the U.S. jobs report but then paring
gains during the session.

12. Gold Down, Fed Expected To Begin
Asset Tapering On Schedule - I
• The dollar, which normally moves inversely to
gold, inched up on Monday and the
benchmark U.S. 10-year Treasury yields hit its
highest level since early June 2021 on Friday.
• The U.S. Labor Department’s jobs report,
released last Friday, showed that non-farm
payrolls were at 194,000, and the
unemployment rate was 4.8%, in September.

13. Gold Down, Fed Expected To Begin
Asset Tapering On Schedule - II
• Although the nonfarm payrolls figure was much lower
than the 500,000 in forecast prepared by
Investing.com, the Fed is widely expected to begin
asset tapering in November 2021 as the number of
COVID-19 cases in the country crested and began to
decrease.
• Although the U.S. job market will continue to feel
COVID-19's impact, it is too soon to say it is “stalling,”
San Francisco Fed President Mary Daly said on Sunday.
• SPDR Gold Trust (P:GLD) holdings edged down 0.2% to
985.05 tons on Friday from 986.54 tons on Thursday.

14. XAU/USD Faces A Wall Of Resistances
Around $1765
• Gold price rebounds from critical $1750 amid
mixed market sentiment.
• Rising energy costs, inflation lift gold’s appeal but
firmer yields warrant caution.
• Gold on the back foot as NFP fails to alter taper
prospects.
• Gold is attempting another run higher on
Monday, despite the risk-on market mood and
persistent strength in the US Treasury yields,
which underpins the greenback.

15. XAU/USD Faces A Wall Of Resistances
Around $1765 - I
• Soaring energy prices combined with rising
inflation expectations continue to back the
case for the Fed’s monetary
policy normalization, even though Friday’s US
Nonfarm Payrolls disappointed.
• The renewed uptick in gold could be
associated with higher inflation expectations,
as the bright metal is seen as a hedge against
inflation.

16. XAU/USD Faces A Wall Of Resistances
Around $1765 - II
• Further, fresh US-China spat over Taiwan and
the phase one trade deal is helping put a floor
under gold price.
• It’s worth adding that the US markets are
closed in observance of Columbus Day and
therefore, light trading conditions could
exaggerate the moves in gold price.

17. Gold Price: Key Levels To Watch
• According to the Technical Confluences Detector, gold is
running into a dense cluster of healthy resistance levels
around $1761, which is the convergence of the Bollinger
Band one-day Middle, SM5 one-day and Fibonacci 38.2%
one-week.
• A firm break above that supply zone is needed to challenge
the next significant upside barrier at $1765, where the
Fibonacci 61.8% one-day coincides with the Fibonacci
38.2% one-month.
• Further up, the buyers will look out for the Fibonacci 61.8%
one-week at $1767, above which the Fibonacci 38.2% one-
day at $1771 will be the level to beat for gold bulls.

18. Gold Price: Key Levels To Watch - I
• On the flip side, gold bulls will find fierce support
at $1754, the convergence of the SMA50 four-
hour, Fibonacci 23.6% one-week and the previous
day’s low.
• Acceptance below the latter could call for a test
of the $1748 level, which is the Fibonacci 23.6%
one-month.
• The last line of defense for gold buyers is seen at
$1746, the intersection of the previous week’s
low and pivot point one-day S1.

19. GOLD (XAUUSD):Why So Slow?!
Technical Outlook

20. Gold Prices Eye CPI As Non-farm
Payrolls Miss, Rising Wages
Complicate Fed Outlook

21. Thanks for listening
Gold Prices Eye CPI As Non-farm
Payrolls Miss, Rising Wages Complicate
Fed Outlook