In depth analysis of February US non farm payroll data: long short game and investment strategy in the gold market

1、 Interpretation of the core points of non-agricultural data

Last Friday (9:30 pm on March 7th), the US Bureau of Labor Statistics released its non farm payroll report for February, with 151000 new jobs added, slightly higher than the previous value of 143000 but lower than market expectations of 159000. The unemployment rate unexpectedly rose to 4.1%, and hourly wage growth slowed down to 3.1%. The data shows that the US labor market is showing signs of moderate cooling, resonating with the previous weak ADP employment data, further strengthening market expectations for the Federal Reserve to cut interest rates within the year.

It is worth noting that the trade deficit has widened to a historic high of $131.4 billion, coupled with the manufacturing PMI approaching the boom bust line (50.3), indicating a weakening of economic growth momentum. Federal Reserve Governor Kugler pointed out that there is an upward risk of inflation at present, and the stickiness of core service prices is prominent. However, the job market still maintains basic balance, and policy interest rates need to remain stable for a period of time.

2、 The Long Short Logic Game in the Gold Market

1. Positive factors

Expectations of interest rate cuts are heating up: The market’s probability of the first interest rate cut in May has risen to 52%, and the real interest rate has fallen to -1.2%, highlighting the advantage of zero interest assets in gold.

Safe haven demand support: The situation in the Middle East continues to be tense (escalation of Israel Lebanon conflict, increased Iran sanctions), global central bank gold purchases continue (net purchases of 78 tons in January February 2025), and SPDR gold ETF holdings have increased to 1108.3 tons.

The US dollar index is under pressure: After the data was released, the US dollar index fell 0.3% to 103.4, and gold denominated in US dollars has become more attractive to non US investors.

2. Negative factors

Reduced policy uncertainty: Trump has temporarily suspended the imposition of tariffs (exemption period until April 2), and some hedge funds have taken profits.

Technical pullback pressure: After hitting a historic high of $2956 on February 24th, the gold price showed clear short-term overbought signals, and the RSI indicator entered the neutral zone.

3.Technical Analysis and Trading Strategy

Gold (XAU/USD)

Daily level: The price oscillates around the mid Bollinger Band at $2910, and the MACD red bar shortens, indicating a decline in multi-party momentum. Attention should be paid to the direction of breaking through the $2930 pressure level and the $2880 support level.

4-hour level: bonding of moving average system, RSI indicator 48.43 shows long short balance, recommended range operation: high sell and low buy at $2902-2930, stop loss at $5.

(1)Non farm payroll data falls short of expectations: weak US job market, bearish for the US dollar, bullish for gold;

(2) Non farm payroll data exceeds expectations: the US job market is good, positive for the US dollar, negative for gold.

Silver (XAG/USD)

Daily level: The price oscillates upwards along the 20 day moving average of $32.50, and the RSI indicator shows a neutral bullish trend at 52.3, indicating a need to break through the key resistance of $32.770.

1-hour level: Bollinger Bands close, recommended range of $32.100-32.660 for operation, breaking through $32.770 can be pursued as high as $33.170, with a stop loss of $0.2.

4、 Future outlook and risk warning

In the short term, the gold market presents the characteristics of “policy market+data market”, and non-agricultural data will become a key variable to break the volatile pattern. From a medium to long term perspective, high global geopolitical risks, sustained central bank gold purchases, and a downward trend in real interest rates constitute the core support for gold prices. Investors need to closely monitor: the Federal Reserve’s March interest rate decision (March 19), the implementation of Trump’s tariff policy on April 2, and the evolving situation in the Middle East.

Trading risk warning: Any investment carries risks, including the risk of financial loss. This suggestion does not constitute specific investment advice, and investors should make decisions based on their risk tolerance, investment goals, and market conditions.