Gold WARNING: The Jobs Report just Changed Everything

[00:00:00] Speaker 1: At the time of recording this, gold is absolutely skyrocketing again, hitting its best three-day track record move in the last several months. We've got a runner on our hands here with gold, and from the lows, you're looking at an approximate move of over 10% for gold in very quick succession. But clearly, as you can see on the daily chart, we're coming into some major resistance. Will we see some kind of a pullback, some sort of a reversal, or sharp turn lower in gold? We do have to remind ourselves that in terms of the broader 2026 trend, we have seen a lot of selling pressure in past events where we've seen gold get a runner going. Could this thing get stunted, and could the downtrend continue? Or is there a potential breakout headed towards our way above the 4,500 level? In today's video, I'll be talking about the macro fundamentals, what today's jobs report tells us about gold, the dollar, stocks, and more. As we get started, please remember, this is not financial advice. I'm simply sharing my thoughts and opinions. Trading is high risk. Please be careful. So we'll kick things off by taking a look at the gold chart on the four-hour time frame. We had a massive surge here today following the non-farm payroll numbers. And of course, this whole week, we've really seen a dramatic turnaround in the price of gold. The bulls have gotten incredibly strong here, and the question is, how much more room is there to this upside push? So I think it's a good idea to start out by taking a little bit of a closer look at the data that came out this morning. So starting out, the most obvious one to talk about is the non-farm payroll number, which came in way lower than expected. We were forecasting 85,000 jobs to be added to the US economy. We had a surprise of 108,000 less jobs than expected. Now to counteract that a little bit, you did get some weekly jobless claims, which were okay. And unemployment rate did actually move lower to 4.1%. Though the takeaway here, you have to be a little careful with that, is participation rate was lower. So that would make sense as to why we had less jobs added and unemployment rate went lower. Well, less people were trying to get jobs, maybe stepping away from the labor market, maybe throwing in the towel and trying to get hired, etc. But this week was a string of jobs data that was worse than expected. And this significantly boosted Edgefinder scoring of gold. Check this out. Jolt's job openings missed expectations, a negative surprise. ADP employment change, which is a look at the private payrolls world, was lower than expected. That number also negatively surprised. Now these negative surprises in the jobs market, those are positive things for gold. Gold likes a weaker dollar and a weaker jobs market weakens the dollar and probabilities for rate hikes. Edgefinder maintained its bullish rating as early as July 23rd and still looks very solid for continuations, broadly speaking, to the upside. By the way, if you do not have access to Edgefinder, now is a great chance to sign up for a trial and get some information about how the product works. If you've been meaning to take your fundamental analysis to the next level, this is the tool for you. It automatically monitors inflation, jobs data, economic growth data, institutional activity through the commitment of traders report, technicals, and crowd sentiment to generate an overall summary for your trading to build more insights. If you're interested in trying it out, there will be a link in the description down below to sign up. So from a technical perspective, we have an explosive move higher. I mean, just look at these four hour candles. These are incredibly positive, bullish looking candlesticks, and you're threatening to break out through some critical levels of resistance, which we'll talk about in a moment. Now, I'm not long gold. Do I wish I was? Sure. My long-term passive portfolios, I have gold longs all the time. So at least I have some coping I can do in that world. But in terms of short-term trades, I don't have anything on gold. So if you feel like you've missed the run here to the upside, then hey, you're not alone. In terms of my active trading portfolio, I don't have any trades open on gold at this time. Let's get constructive and talk about how we cope with that, what we do about it, if we're not in the gold longs and want to be. Now, you might have a different perspective. You might be bearish on gold. You might have a different view. But me personally, I am bullish on gold, but have to wait for retracements. Now, sometimes that gets me in trouble. And when I say trouble, what I mean by that is I'm sitting on my hands doing nothing as gold rallies without me. Wouldn't be the first time. It wouldn't be the last time. This is trading 101. Most of the time, trading is uncomfortable. And that's something that you kind of have to get used to. Most of the time, you're either in a drawdown, waiting for the pullback. Your trade is going against you. Very rarely are we in just the perfect sweet spot trade. That's like percentage-wise, I would say like 10% of the time or less. Most of the time is a waiting game. And right now, that is the only thing that I can do on gold. I'm looking at the 61.8% retracement, as well as the 38.2% retracement now, which we can map out as another new key area of support. Now, obviously, had I known price was going to turn around right there perfectly, I would have bought that spot right there. But hindsight is a dangerous thing in trading. That being said, with the new information that we now have on this price chart, that resistance that we're currently testing up here, if that does produce a bit of a short-term retracement, I'd be looking at the 38.2% retracement zone as a possible buy-the-dip opportunity with a calculated risk-reward. Now, what I mean by that is that if I enter that trade, am I going to go all in? Do I know that gold is going to go higher? No, of course not. We never know with certainty what price is going to do next. We only make educated guesses and manage our risk. That is our job as traders. We are not fortune tellers. We're not, you know, perfect predictors. There's no certainties in this game. It is all probabilities. And so whoever you watch, whatever your trading guru or idol is, know that they are wrong often too. Everyone is wrong in markets more often than they care to admit. It's hard. This stuff is difficult to predict. That being said, the only game in town for me is to wait for that pullback. If it produces a setup for me, I take that trade with a calculated small risk on the account looking for the continuation. So let's just say we do get a price retracement to this 38.2%. And I could set up a trade here where I'm looking for that continuation. Now, this is a bit of an aggressive entry. I will acknowledge because this was a brief pullback, we found support and continued the rally. If we come back into that area, I would generally like to see that area hold pretty quickly. Otherwise I'll scrap the trade for a small loss. If we retrace further down into the 61.8% retracement though, that would probably be an even more attractive entry point in my personal view for a long side move around the 41.50 to 41.40 area. So these are two trade ideas that I have going into the end of this week and into next week. Now, you might notice that if you watch my video yesterday, I was saying, Hey, we might be seeing a retracement here, but I won't bet the short side. This is exactly why when something really wants to trend, pullbacks can be very brief and trying to shorten, get cute and get creative with trying to fight, fight the move here is something that I just don't generally like to do. So when it comes to gold, am I betting the reversal here? Again, I will say this, as I said it yesterday, no, there is not an interest for me to get short here and try and play the little reversals because oftentimes they look enticing. They look like they're reversing just for the price to explode higher and to leave a lot of people in the dust, including myself. Again, I am willfully telling you I'm not in the gold trade. I wish I was, but I have to stay diligent. It's what it is. What has helped me to get this far in my trading career. I am consistently profitable overall, not because I'm giving into my impulses all the time, but because I'm waiting for my setup to come to me. And sometimes it just doesn't. That being said, being long gold has been a phenomenal play. And I know a lot of people in our group and in the comment section, especially people who have had edge finder who pointed this out, Hey, edge finder got bullish and they found a setup, maybe a trade like the one hour or saw something that I did not see, but plenty of people are catching the long side. And as the, you know, kind of lead developer on edge finder, that makes me feel pretty good too. So that's another way I'll be coping with that today as I go into the weekend with a beer in one hand and tears in my eyes. Stocks also made a big push higher here today following the CPI, I'm sorry, the non-farm payroll number, though worth mentioning CPI is coming up on Wednesday of next week. So that will also be a big potential market mover as we go into that. While I do have several long positions on individual stocks from an index level, I'm a bit cautious here and waiting for some retracements. The NASDAQ is looking a little bit wobbly here. It's just back in this consolidation zone. And while this was a very aggressive pop in price, I think that if you're looking at NASDAQ, for me, it's either I'm waiting for retracements into support levels or a breakout beyond all time highs. Generally speaking, I lean modestly positively on stocks at this time from a short term trading perspective. While longer term, I'm just kind of neutral. I don't have interest in going long a bunch of stocks for the long term here. But in terms of short term trades, I do think price action looks very bullish. And I would not be surprised if we continued the strength into the second half of this year. But one thing that is kind of holding me back on being so bullish on stocks, here it is right here. The fundamental score is negative within edge finder, the nonfarm payroll number coming in worse than expected. While some traders would argue, hey, that's going to mean less rate hikes, that's really good for stocks. I would argue that for me personally, this is showing more of a concerning sign for the state of the consumer than anything else. Let's let me show you something a little bit interesting that we can uncover if we look a little closer into the report today. First of all, I want to draw your attention to where we are on an absolute basis with inflation, we were at 4.2%, 3.8%. Right now we're sitting at 3.5% year over year inflation. Now I know before people start getting mad in the comments, I know that when you go to the store, it does not feel like prices are up just 3.5%. That being said, the index here is an aggregated view at a lot of different, you know, it's a CPI, it's a basket of items and their price changes over time. However, things feel more expensive than that, and understandably so, but I want to show you something that also we can dive into for understanding our labor data report today. Today's video is sponsored by Ola Prime. Whether you're a futures trader, a forex trader, a gold trader, whatever you are, Ola Prime has one of the widest selections of trading account types for their traders. They offer a lot of opportunity to scale into larger accounts over time and offer some of the most competitive pricing that I've seen in the prop firm space. And to make it even more competitive with our promo code A1Trading, you can get 20% off any of their account types. 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If you're interested in exploring Ola Prime, use the link below and take your time to review all of the different terms and conditions to make sure this is the right prop firm for you and your trading style. Thank you to Ola Prime for sponsoring today's video. Now back to the content. If we go to our wage growth numbers, understand that today's wage growth hitting fresh lows at 3.2% year over year. This is interesting, because now we have inflation even at the aggregated basis, which feels lower than it actually is for a lot of our day-to-day goods coming in lower than average wage growth. So wage growth or WG here is coming in lower than expected as an aggregated economy. We are seeing this across the board. So inflation, which has largely been driven higher by oil prices, gas prices, et cetera, through the Middle East conflict, simultaneously rising faster than people's average wage growth. That hurts the consumer. Think about this from a localized perspective. Now, if you are somebody who is like, okay, I got a wage increase in the last year, but it was less than the price of, you know, stuff going up, then on an aggregate basis, the overall result is that you earn less real income post looking at these two factors. Now, again, why that is challenging for the average consumer is obvious, but then you take that and you extrapolate that across the whole economy and that makes people feel not so good. That could also be a contributing and further contributing from here factor to why consumer confidence has been in the gutter. We have seen for quite some time the state of the consumer. If you felt like, dang, things are kind of rough out there. It's expensive things, things are hard to afford. You are certainly not alone. You should not feel gaslit. You are part of the general population, which for the last five years has been experiencing a cost of living difficulty. Now, this is the US, but understand this is not US central, right? This is globally. We are seeing higher oil prices. This is causing prices to rise. It's been a challenging environment. And if you felt that way for the last few years, then you are certainly not crazy for feeling that. Now, I'm deep diving on the edge finder here on your Friday. So first of all, what's wrong with you? Why are you so lame that on Friday you sit here and read economic reports with a guy named Trader Nick on YouTube? That's on you, bro. But in all seriousness, that takes something away from kind of the jobs report that we saw today. And by the way, I'm just kidding. Thank you very much for watching my content. And if you're a nerd about this stuff, then cheers, hit that subscribe button, all the good YouTube stuff, and hopefully you'll keep coming back and hanging out with me. All right. So the jobs report, right? Weaker jobs further extrapolate that issue. In fact, what this to me signals with GDP growth, missing expectations, services, PMIs meeting, missing expectations and consumer confidence weaker than expected. You lace that in with soft jobs reports that we got this week. To me, there's a bit of a concern about a slowdown in the economy. Slowdown in the economy could potentially mean less hiring people spending less money, corporate earnings getting hurt. So that is why it is scored in the way that it is within edge finder that the jobs market data is putting negative pressure on the outlook for the stock market. I hope that makes sense. We did a full round, uh, you know, kind of round the clock synopsis here, but that is why I actually made the point on today's live stream. And I don't know if this prediction will come true, but maybe we can play the clip where I was speaking with Chris Pulver today about my prediction for a potential kind of follow through to the downside. A lot of stuff here today, after the non-farm payroll, the jobs number on initial release, NASDAQ was up like 1.2% on the day. Uh, and now is up just 0.56%. And I'll double down on that. I wouldn't be surprised if we're flat or even a little bit negative today. Uh, here's the breakdown as to why 10 seconds here to go before that number releases. We'll have it, uh, pulled up for you guys to see the reaction everywhere. Let's see what we get. [00:16:03] Speaker 2: Drum roll. Drum roll. Yep. 4.1 unemployment. Okay. Non-farm in the negative. Wow. Dollar is [00:16:14] Speaker 1: diving right now, guys. Minus 23k guys. Wow. And there it is. So the mixed the right away though, mixed unemployment rate. Yeah. Yeah. That, that kind of like mixes things around. So before you just only look at the headline number, also recognize 4.1% is lower than expected. That is a soft job sprint though. Uh, and, and again, what they'll say that people, you know, people will point out, Oh, this is low participation rate. You know, that's why the 4.1, that's what people will say. So, wow, softer, softer than expected on the, uh, employment change by a large margin, Alan. [00:16:55] Speaker 2: So at that point, which one do you pay attention to? Do they wash out? Like for the viewers and for my sake too, like the, do they wash out? Does one overvalue the other? Like the unemployment rate was a marginal change versus the NFP report was a huge divergence in the expectations. Uh, I, I kind of say like the, the NFP report would probably drive the market moving forward for a little bit, the price action today. Um, but is, is, is there a kind of one that you overvalue over the other, or are you kind of in the same camp? [00:17:27] Speaker 1: I'm going to make a prediction really quick, Alan. The dollar yen is not going to like this. Uh, so I think that the, I think the headline, the jobs change is the more important of the two. I'm just getting flashes of, uh, I'm getting flashes right now of August, 2024 for my market historian friends who've been around for a little while. [00:17:48] Speaker 2: That was a terrible time for me, Nick. I, I was on vacation, neglecting what was going on. Come back August. I'm like, I'm like seeing dips and I'm buying them and it just continues on [00:18:01] Speaker 1: lower that August 5th. Yeah, no, I think, uh, okay. So, so let me break this down here a little bit. Cause this is kind of interesting. So August 5th, I think that's what you said. Yeah. Like there was what happened on a Friday, we had a non-farm payroll on a Friday. It was way worse than expected. The bank of Japan was doing the same thing that it's doing right now, trying to defend the yen, trying to strengthen the yen. Then what happened? Jobs number comes out super weak. Dollar plummets lower like it's doing right now. It sold all day long. And then on the Sunday night open, Pulver and I, who's about to be on the show in a second, we watched in awe after, you know, basically it was a BOJ freak out where it was like massive, massive yen strength, massive dollar selling stocks, flooded lower tech stocks, got, you know, hammered. Um, I wouldn't be surprised to be completely honest if, if there is a little bit of that jitter come in. And I think you can see it in gold right now because gold is ripping. However, full context of that event, everything sold in the second half of the day. So gold ripped then fell. So we are coming into major resistance here on gold. We'll keep an eye on it. Okay. Did you, did you kind of hear my little rant there about August 5th, 2024? Yes. Does this not feel very similar? You have suddenly a, I mean, that was a hundred K miss on jobs, Bank of Japan defending the yen, U S treasury partaking in defending the Japanese yen, right? Um, markets have been pricing in rate hikes. You've got weaker jobs print the whole week long jolts, ADP, NFP weaker than expected. Could there be a scenario here where the market this morning is saying, Ooh, this is great. We're going to get rate cuts. And then by the afternoon, it's more of a freak out about the economy that that's my, [00:20:02] Speaker 3: my concern. Well, I mean, August is kind of that perfect window for that stuff to happen where, uh, I mean, this, this is a pretty bad job print where, I mean, look at the U S economy needs about a break even like 20 to 30 K per month. So any negative is not good. And it also brings the conversation back to, you know, the fed has kind of ignored labor for the last couple of months since war stepped in. It's all about task force, all about inflation, all about price stability. Labor has been like, you know, it's been fine since we've had some decent non-farm prints that have been over, you know, 50 K or a hundred K now it's like, Oh, uh, tech has been laying off people since 2022. Tech is laying off more people now. Um, other companies, I mean, my fiance works in the airline industry, dude, it is fricking cutthroat right now. Like all these, uh, airlines are cutting routes. They're cutting markets. They are, uh, they're not necessarily downsizing people yet, but it's getting to that point where like everything is being watched, um, very, very closely. And like, I mean, I think, uh, American airlines, United airlines admitted to anywhere between two to $6 billion in added costs with fuel just in these last, uh, these last quarters. So it is, it's a, it's a little tight for sure. [00:21:11] Speaker 1: Yeah. Well, Chris, I also just noticed something. Look at this, the revised number. Yeah. 57 down to 20, 57 down to 20. So let's just do some quick math. That's 30 and, and notoriously math is hard to do while you're live streaming. So bear with me. Let's say that's 40,000 less on the last one. And let's say that's a hundred thousand less today. Yeah. That's a huge jobs mess. Yeah. Unemployment rate going down to 4.1%. Again, I know what people are going to say right off the bat participation, participation rate lower. That's why the 4.1% like people are turning, trying to get a job basically. Um, yeah, that, that, uh, I mean, someone knew something because gold was up 2% before the start and you know, gold is just ripping higher. That's the trade in the morning. The question though, I, I have is in that August event that we saw in 2024, it felt eerily familiar, bad jobs, print BOJ defending the end. Uh, and here you go. You had gold move higher on that day and then reversed all of its gains went super negative. Everything correlated to one. And we had a dump into Sunday night. So I'm not, I'm, you know, I'm just theorizing here. Um, but that sort of labor market shock, I think it's going to redirect the conversation a little bit from just looking at [00:22:33] Speaker 3: inflation. I agree. Um, looking at like gold versus silver. I mean, Nick, I think, you know, you know how this whole plan was okay. We're going to, we're like, think of Doge, uh, with, with Trump and, and, and Musk, right? Uh, think of Doge. We're going to cut, we're going to, we're going to balance the budget. Well, that pivoted very aggressively into, we're going to grow. We're going to grow our way through this debt. We're going to grow our way through this deficit. We're going to run the economy hot. I think this is what the next phase is that everyone's been talking about through this fourth turning, which is if we can't grow, then we print, like we're going to do everything. Like this is kind of the, the last stages of like, can we sustain this market at these all-time highs? Can we support these economies? Uh, can we intervene when we have to intervene? Um, and at some point, like, does it, does it happen? Like price action wise, where we're, we're trying to support, support, support. We're trying to intervene and manipulate. And all of a sudden, like price action doesn't accommodate that move. Um, I don't think it's there yet, but I think this is what maybe gold is, is sensing and sniffing out. So when we look at this, this run, I mean, silver is running right into pretty key resistance. Um, gold, same type of thing. It's like 4,400 was a, you know, late March low. Uh, once we broke that level, we, we obviously had a fresh low. So I think the, the overtaking point for me is we have to have a pretty firm close above 4,400 and I'm, I'm, I'm looking for a pretty solid bottom. I mean, I'm up to fresh year today, highs, uh, today, which is kind of nice considering we're not at all time highs at 77 90. Um, and then gold is ripping. So it just shows like that accumulation I've been doing these last three, four or five months have been for, for a good reason. Um, and this has started to show better signs of life. So, um, yeah, man, this rotation for the second half of the year, it's like gold. I mean, dare I throw Bitcoin into the mix? I mean, Bitcoin is only at 65 K it's not having nearly the, the, the run that, uh, that gold is lately, but I want to, I want to wonder like, will those assets [00:24:31] Speaker 1: come in favor again before the end of the year trading fundamentals can be a lot of hard work, but we actually made a pretty cool free telegram channel where we are publishing constantly updates on what is going on from a macro fundamentals perspective. And no, it's not AI. It's not written by a robot. It's written by a real person on our team. His name is Alan. He puts together a report each day on what is going on and things like gold currency pairs, commodities, indices, et cetera, on a global financial fundamental analysis basis. It's a really cool newsletter where you can basically stay on top of things by reading for like a minute per day. If that would be interesting to you to join the free telegram channel, there is a link in the description down below on this video that you can join and get into the action there. We also offer special discount perks for our products, as well as for funded accounts and for brokerages, et cetera. And we also do some giveaways as well. So definitely take a second to join the telegram channel in the description down below. I also want to take a second to just genuinely thank you for supporting my content here. Make sure to subscribe and hit the thumbs up button if you have not already. And I do hope that more videos in the future will continue to help you on your trading journey. Good luck. Thanks for watching.