How to trade spot gold on NON-FARM payrolls day?

Fundamental Analysis | CMP $1926

The greenback is also drawing demand, as markets remain risk-averse after Chinese business activity reported re-ignited China slowdown concerns while the slump in oil prices is dulling gold’s appeal as a hedge against inflation. However, reports of the continued Russian hostilities in the Eastern region of Ukraine, despite its pledge to reduce military activities in Kyiv, help keep the downside cushioned in gold price.

Gold price has confirmed a bearish wedge formation on the four-hour chart earlier in the Asian session this Thursday.

Scenario A: Gold: $1888/1866/1833?

If the bearish momentum extends, gold price could fall further towards 1907/1888/1866/1830 stops, a reversal from 1866/1830 zone can be expected with a RT 23.6 on M5, M15 and M30 / 30% RT in next 4 days.

Scenario B: Gold: $1947/1966/2022?

If the Bullish momentum pushes Gold price through $1933 barrier, $1947 and $1966 can be the next target for Gold, opening way to $2022.

Heading into the NFP showdown today, gold price is lacking a clear directional bias, as investors are hesitant to place fresh bets. Further, the resumption of the bond rout is fuelling a rebound in the US Treasury yields across the curve, which is warranting caution for gold bulls. Meanwhile, the US dollar also extends its latest advance amid a cautious market mood, as China’s Caixin M PMI contracted sharply in March while a majority of the districts in Shanghai are under lockdown due to the latest covid wave. Markets also await the Russia-Ukraine online peace talks for some clarity on the ongoing saga. The US NFP will emerge as the main market driver for gold price, as it will offer fresh insights on the Fed’s next interest rate move.

Technical Analysis | CMP $1926

Gold Price – Key Indicators, Factors, Price Zones & SR Levels to watch:

 PRSR ZONE BASED TRADING SCENARIOS

Figure 1

PRICE CHANNEL | PRTP BASED TRADING SCENARIOS

Figure 2

A break above $1933 might result in price trap of $1947-1966 and a further bullish trend might help GOLD bulls to achieved $2022. However a crash below $1926 might open gates for $1907, $1888 – $1866/1830 before retracement is achieved at 23.6 M15/M30 in next three days.

TRADING STRATEGY:

• Observe price at US OPENING SS1 and then US SS2
• Observe S2-S3 and R1-R2 for reversals/retracement
• Do not enter between the SR zones or in pivot zone

Observe: FIB 23.6% followed by S2 and S3 (1888-1866 zone)
Observe FIB 61.8% followed by R1 and R2 (1947-1966 zone)

Implement RM till 25 after 15/30 min. and price gap 12/18.24 after NFP
Implement GR/SM  after 25 price movement

Golden Ratio based money management should not be used at least till $20 price movement in any direction, if SM needs to be ignored.

Figure 3

Kindly observe the crucial limits/stops levels mentioned by me in this analysis in addition to possible crash and rise zones as mentioned in Figure 3.

Today, I will prefer to BUY session/daily lows below Support zone 2 and 3, and I will prefer to SELL above Resistance zones 1 and 2 with a target of NET average profit, if fundamentals support and favour the same.

It will be wise to place positions after 15 minutes of NFP Data / $15/25 movement, keeping in mind NYSE opening pressures might result in a reversal or extension of the price trend for next 30-45 minutes. Movement of 18,24, 36 or 60 dollars on Gold price is not something unexpected nowadays, and a surprise on Monday during early trading hours can not be ruled out too, so closing all positions today in net average profit is always the best trading strategy for every trader who wants to safeguard his principle.

BUY/SELL STOPS | BUY/SELL LIMITS: TARGET NAP ( Net Average Profit):   

S5 ZONE 1863 | DOWN TREND (Below 1926)  : 1907-1888-1866-1830
R5 ZONE 2011 | UP TREND (After 1936)          :  1947-1966-1985-2022

It is always wise to first PLAN THE TRADE, and then TRADE THE PLAN! Hence, it is suggested to first observe the crash or rise with specific zones and levels in mind on the basis of various fundamental and technical parameters mentioned above, before entering a trade in a specific direction with a target of net average profit in a specific set of trades.

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