Nonfarm Payroll Night! How long can the enthusiasm of gold bulls last?

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　　Written by: Jerry Chen, Senior Analyst at Gain Capital Group

　　The United States and Iran clashed again on Thursday, casting a shadow over the ceasefire and the peace agreement under discussion, although Trump stated that the ceasefire remains effective. Considering the Iranian Foreign Minister's visit to China this week and Trump's visit next week, there is still a high possibility that both sides will sign a "ceasefire memorandum of understanding" in the near future, paving the way for future dialogue.

　　International oil prices dipped slightly on Thursday but rebounded in early trading on Friday, with Brent crude climbing back above $100. Data shows that U.S. crude oil inventories fell by 2.31 million barrels last week, less than expected. The temporary ceasefire cannot alleviate global oil supply risks, resulting in a very evident decline in inventories since the outbreak of hostilities, limiting the downside for oil prices.

　　The uncertainty in the US-Iran situation helped the US dollar index rebound overnight, while gold edged down slightly to around $4685.

　　European and American stock markets mostly closed lower overnight, and technology stocks have paused their upward momentum for now, but America's solid economic fundamentals and strong earnings reports suggest that buying on dips still applies.

　　USD/JPY rebounded to 156.92 on Thursday. The U.S. Treasury Secretary will visit Japan next week, and the market is watching closely to see whether he will support and participate in Japan's intervention, or urge the Bank of Japan to accelerate rate hikes. Since intervention remains a risk, traders need to watch for possible price reversals after surges. The threshold for central bank intervention has dropped from last week's 160 to 158 this week. On the downside, 155-155.50 is the current support zone.

　　Focus on the U.S. April Non-Farm Payroll report on Friday (20:30 UTC+8).

　　Based on employment data released this week, the labor market continues to remain in a "low hiring, low layoffs" balanced state, overall stable, with geopolitical risks not yet having a substantive impact on employment data.

　　· The ratio of job vacancies to unemployed persons in March rose to 0.95, slightly higher than February's 0.91

　　· April ADP employment numbers were higher than both previous values and expectations

　　· The four-week average of initial jobless claims fell to the lowest level since January 2024

　　· There were 300,000 layoffs in the first four months of this year (with the tech industry being hit hardest), down 50% from the same period last year

　　The market expects a net increase of 62,000 jobs this time, down from 178,000 previously, and the unemployment rate is expected to remain at 4.3%.

　　If the employment report exceeds expectations, it would make it harder for the Fed to lower interest rates and may further turn hawkish, which is a challenge for the new chairman but could boost the US dollar. The interest rate market is currently betting on a slight rate hike before the end of the year. On the other hand, if the data falls short of expectations, the US dollar may remain under pressure and provide confidence for gold bulls.

　　If the jobs report is mixed, the unemployment rate should carry more weight, as it is a more closely watched economic indicator by the Fed. If the unemployment rate rises to 4.4% or even higher, it could trigger a short-term correction in US equities.

　　The following chart shows the last 12 Non-Farm Payroll data and market performance on those days, for reference only.

　　XAUUSD Gold 4-hour

　　As shown in the chart, gold has shown a positive recovery momentum since Tuesday this week. After breaking through the key 4660 level and trendline resistance, a bullish continuation has formed on the hourly chart, with support moving up from 4500 to the 4680-4700 area. Bullish sentiment is heating up, and a breakout above 4760 could challenge April's high of 4890 and the $5000 level.

　　If the Non-Farm Payroll report is strong, it may temporarily suppress gold prices, but as long as it does not fall below 4660, a bullish outlook can be maintained. Conversely, a weaker-than-expected jobs report could boost bullish confidence. The overnight implied volatility for gold is 22%, suggesting that Non-Farm Payroll night will not cause significant volatility in gold.

Editor: Zhu Henan