January 7

Central Bank Selling Divergence and Small Non-Farm Payrolls, Spot Gold Prices First Drop Then Rise Tonight

Investment is like a journey through adversity; markets will always have ups and downs. Gold prices are at a historical high, and short-term fluctuations are normal, with long-term value support unchanged. The current market is at a critical point where central bank strategies diverge and small non-farm payroll data are released. Grasping the rhythm is key to finding opportunities amid volatility.

Recently, the "central bank selling gold" has attracted market attention, mainly due to the divergence in strategies among multiple central banks. Russia has sold physical gold publicly for the first time to fill its fiscal gap. The Philippines is considering cashing out at high levels due to excessive reserves. However, the overall trend of central banks buying gold globally has not reversed; it has only slowed down. This creates technical selling pressure in the short term, but the long-term support remains intact. Tonight’s small non-farm payroll (ADP) data shows a previous value of -32,000, with an expectation of +45,000. If the data falls short of expectations, it will boost market expectations for rate cuts, which is positive for gold prices; if the data exceeds expectations, it may strengthen the US dollar, exerting short-term pressure on gold. Additionally, geopolitical tensions increase safe-haven demand, and China’s central bank has been increasing gold holdings for 14 consecutive months, providing some support for gold prices.

Today, spot gold in the Asian session surged then retreated, touching $4,500 per ounce during the session before pulling back. Currently, it is trading around $4,446 per ounce. From the candlestick pattern, gold is oscillating in a high-level range, with short-term resistance at the $4,500 mark and support around $4,400 and $4,375. The short-term moving averages are in a bullish alignment, but the divergence is large, indicating a technical correction may be needed. However, the long-term upward trend remains unchanged.

Tonight, spot gold is likely to show a pattern of first dropping then rising. Watch the resistance zone at $4,480–$4,500 and the support zone at $4,400–$4,420.

In terms of trading, consider a light long position within the $4,400–$4,420 range, with a stop-loss at $4,380 and a target of $4,460–$4,480.

If the data exceeds expectations and causes gold to drop quickly to around $4,375, add to the long position with a stop-loss at $4,350 and a target above $4,450. Be alert to sharp volatility triggered by data releases, and strictly control position sizes and stop-loss levels.

The above is only personal advice for reference and does not constitute investment guidance. Please follow Jing Sheng Shi Pan’s layout for specific actions.