On Thursday during the day session, the gold market continued the narrow range oscillation pattern that has been ongoing this week, with a slowing volatility rhythm and a continuously narrowing range. Spot gold repeatedly tested the range of $4186-$4216 per ounce, ultimately trading around $4197, presenting an overall weak consolidation trend. This state of 'calm before the storm' essentially reflects the market's cautious buildup before key data and significant policies are released. Beneath the calm, however, lie two core variables that are about to trigger a market explosion, making it difficult for the oscillation pattern to be maintained for long!
The two major risk events that need to be closely monitored are as follows:
1. **Short-term directional guidance for Friday's non-farm data**
The importance of this non-farm data is compounded by the previous ISM services PMI and the November PCE price index's linkage. If the non-farm data shows a cooling job market, it will strengthen the Federal Reserve's expectation of a rate cut in December, putting pressure on the US dollar index and providing momentum for gold to break through the $4200 mark; conversely, if the employment data is stronger than expected, the cooling of rate cut expectations will put pressure on gold prices to test the $4170 support. Unlike before, this non-farm data will also impact market pricing for the rate cut rhythm in 2026, with its guiding significance being more persistent.
2. **The global market impact of the Bank of Japan's rate hike in December**
Currently, market expectations for the Bank of Japan's rate hike in December have skyrocketed to 80%, with a high probability of raising the policy rate from 0.5% to 0.75%. Once implemented, the gold market will face a severe hedge between safe-haven buying and bearish pressure: on one hand, the global financial market turmoil triggered by the rate hike (such as the unwinding of carry trades and bond market sell-offs) will stimulate gold's safe-haven properties; on the other hand, the appreciation of the yen and the narrowing US-Japan interest rate differential will weaken the attractiveness of gold as a non-USD asset. Under the collision of these dual forces, gold prices are bound to experience wide and severe fluctuations, potentially even replicating the market turmoil of December 2022.
## US market trading strategy
1. **Overall tone: Fluctuating accumulation of strength, not overdrawn non-farm momentum in advance**
On Wednesday, the market did not consume trading space due to changes in Federal Reserve policy expectations, and the narrow consolidation during Thursday's day session also confirmed the cautious sentiment of funds, with expectations that the US market will maintain a range-bound fluctuation pattern. Before the non-farm data is released, neither side will act rashly, and the overall volatility is likely to revolve around the $4170-$4220 range.
2. **Key support and resistance levels**
Short-term support focuses on the **$4170-$4175** range, which is both the lower edge of recent fluctuations and a key defensive point for bulls. Positions can be lightly built in this range for short-long strategies; the short-term strength-weakness dividing point is at **$4265**, which is close to the previous high of $4262 from nearly six weeks ago. Only with an effective stabilization at this position can technical buying be activated, driving gold prices to challenge the medium to long-term target of $4400.
**Disclaimer**: Personal opinions, for reference only, investment involves risks, and caution is required when entering the market!