Gold analysis ahead of the NFP. Buy USD or Gold. No other choice

The US job market report will be released today after few hours. NFP is the most important report among all the job market reports is the forex market. At the same time un-employment and earning reports will also be released, and they are also important too.

FOMC ended two days ago. FOMC was the total hawkish stance, although the dollar weakened immediately due to the 50 bp rate hike was priced in already. When the Fed president said there was no discussion between them about the 75 bp rate hike, the USD became instantly weak.

The 50 bp rate hike was already in the price, there was talk that they might increase the rate to 75 bp. Since that didn't happen, the dollar weakened. Although yesterday the USD turned around again against all the major currencies.

Now the question is, would it be better to buy gold or stay in the Sell mode on NFP today?

In the last FOMC, the Fed has cleared one thing, they are most worried about inflation now, not so much about the labor market. Either way they want to keep inflation under control.

The Fed president also said that the Russia-Ukraine war has made almost everyone's business worse. It is clear that the Russia-Ukraine issue is largely responsible for dropping macroeconomic reports for most of the countries.

Anyway, let's talk about today's NFP. How can an NFP report be? Last month's NFP report dropped much more than the forecast. About 13/14 reports are related to how NFP can be. The ADP and manufacturing report dropped this week but the JOLTS job opening report was positive. And the market forecast is more negative than before. All in all, I think the report may be negative. This is my very personal opinion.

In the last 2/3 months, NFP has been seen to add more than 700k jobs. Normally it will add fewer jobs next month, but if the NFP shows more than 300K jobs, the dollar will not weaken too much, unlike other currencies. The euro-pound is weaker so the USD has a better chance of becoming stronger again if in case the NFP drop and the USD get weaker for the short period of time. But ultimately, the USD will remain king against all the major fx currencies.

As far as Gold is concerned, the overall environment, the economic condition is still favoring to buy gold. Yes, Gold is currently undergoing a correction, it may stop at 1835/1840 nearly to our trendline support zone.

The NFP report gets better, the gold could drop to 1835 but the gold has high chances that it will bounce back from the 1830/1835 price zone. Because one thing is very clear from the Fed's words that the Fed is concerned about inflation, and higher inflation means positive for the gold. The Russia-Ukraine issue is not yet resolved. In most countries, economic reports are collapsing one after another. Will do more in the future.

Therefore, investors have only two options in front of them, either stay in dollar buy mode or commodities like gold, oil, etc. Outside of these two, there is no chance of anything else in bye mode, unless the situation changes.

Gold technical level.

From the present rates, 1890 is the immediate resistance level. If NFP prints negative, gold will break out the immediate resistance and and will move above the $1900 price zone again. so, breaking above 1890, our first target is $1900.

If earnings or unemployment reports all dropped together, than is is just a matter of time that gold will hot above $1910/1914. Final target to the upside is $1950.

On the other hand, if the NFP prints positive, gold immediately may test $1860. Breaking below $1860, our next target to the downside is $1850 and final target to the downside is $1835. I think gold will bounce from the $1835/40 zone again to above the $2000 price zone gradually...