Zong Xiaoli: The non-farm payrolls report officially releases tonight. How will the USD and gold react?

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Recently, more and more people are expressing their confusion about the market — despite the intense situation in the Middle East, with lively battles between Dapao, YSL, and Lang Lang, which is a typical example of geopolitical factors stimulating the market and clearly benefiting gold, the market performance has been disappointing. Instead of rising as expected, gold has been gradually declining, leaving many puzzled…

The main reason is that the market focus has shifted. On one hand, the Middle East situation has become tense, and the market has gradually adapted to this rhythm. On the other hand, gold prices are too high, with bubbles, and there is a need for a correction. Plus, the market’s liquidity gap is widening, so a decline in gold prices has become a natural outcome. This is completely different from the previous geopolitical logic, so the trend has also changed. Gold prices are inching down, and the impact of geopolitical factors is minimal. The more intense the geopolitical situation, the more gold prices retreat…

Regarding this situation, will there be any change after tonight’s non-farm payroll data is released? I advise caution. If gold cannot even break through 5140, how can we talk about a rally?

As for the US dollar index, technically, there is significant resistance because it has closed with upper shadows for three consecutive days — a classic sign of a potential top. Interestingly, the dollar is not showing signs of decline but is instead actively pushing upward, which puzzles many. Does this mean the dollar index will continue to rise? Indeed, the dollar index aims to go higher because only rising can protect the fundamentals and prevent liquidity from flowing out. Especially after tonight’s non-farm payroll data, the impact on the dollar index will be substantial. Everyone should be cautious of a sudden rise after fluctuations. Therefore, low buying on dips remains a prudent strategy for now. Just for your reference!

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