Quotes May Be Closer to Mean Reversion, with Focus Shifting to U.S. Nonfarm Payrolls Report Release

Summary:

During Tuesday's Asian and European trading sessions, gold prices fell below US$4,300 amid profit-taking and short-term bull liquidation, halting their upward momentum. Additionally, overnight optimism surrounding Ukraine peace talks weighed on safe-haven assets like gold. Attention now shifts to the release of U.S. nonfarm payroll data.

SELL XAUUSD

Close Time

CLOSED

4324.93

Entry Price

4065.00

4372.00

5183.49 +44.97 +0.88%

21.2

Pips

Profit

4065.00

4322.81

Exit Price

4324.93

Entry Price

4372.00

Fundamentals

Overnight, optimism surrounding Ukraine peace talks also weighed on safe-haven assets like gold, with market sell-offs causing a notable decline in gold prices. During Tuesday's Asian and European trading sessions, profit-taking and short-term bull liquidation pushed gold below the US$4,300 level, halting its upward momentum. As time progressed, market focus shifted toward the release of U.S. nonfarm payroll data.

In the U.S., the delayed October nonfarm payrolls (NFP) data and the full November employment report will both be released at 9:30 a.m. Eastern Time on Tuesday. We anticipate that seasonal hiring delays will impact October's nonfarm payrolls figures and project that payrolls will increase by only 20,000.

If this effect is reversed, nonfarm payrolls are expected to grow by more than 50,000 in November. Both projections are below September's growth rate, which slowed due to a further deceleration in labor supply growth. We anticipate the unemployment rate will remain unchanged at 4.4% in November. Should data indicate a slowdown in the U.S. labor market, this would reinforce market expectations for Federal Reserve rate cuts and boost gold prices.

Regarding the central bank, overnight, New York Fed President John Williams stated that the Federal Reserve's monetary policy has shifted from slightly tight to neutral, meaning its monetary policy for 2026 is “well-prepared.” He emphasized the need to restore inflation to the 2% target level without posing “excessive risks” to the labor market, and believes the current policy strikes an appropriate balance following recent rate cuts.

Quotes May Be Closer to Mean Reversion, with Focus Shifting to U.S. Nonfarm Payrolls Report Release_1

Technical Analysis

Overnight, gold prices continued their downward trend. According to the 4H timeframe, although the overall outlook for gold remains bullish, prices are currently in a death cross formation. This indicates that even if prices rebound in future trading sessions, a pullback is still expected.

Meanwhile, according to mean reversion theory, once the quote tests the upper boundary of the upward channel, the price will tend toward mean reversion indefinitely. The short-term target lies at the midpoint of the upward channel, with the lower boundary ranging between US$4,110 and US$4,065. The path of least risk is downward.

Trading Recommendations

Trading Direction: Sell

Entry Price: 4335

Target Price: 4065

Stop Loss: 4372

Valid Until: January 1, 2026 23:55:00

Support: 4270, 4256, 4242

Resistance: 4293, 4318, 4337

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