gold prices are currently stabilizing around $2,650 as market participants await the release of the US ADP jobs report and the Minutes from the Federal Reserve’s December meeting. Despite an earlier rebound, gold has struggled to maintain higher levels, largely due to the hawkish sentiment surrounding the Fed following recent robust US economic data.
Recent labor market indicators are reinforcing this sentiment. The latest JOLTS report revealed that job openings in November surged to 8.098 million, significantly outpacing forecasts that expected a rise to 7.7 million. This upbeat job market information has led to a decreased likelihood of interest rate cuts from the Fed in the near future, with only a 37% chance predicted for a reduction in March, according to market assessments. In light of this, bond yields continue to rise, further restraining gold ’s upward momentum.
The imminent inauguration of US President-elect Donald Trump is also influencing market expectations. His potential introduction of tariffs and protective economic measures could fuel inflation, prompting a stronger US Dollar and necessitating higher interest rates. Although the Dollar’s recent advance has paused, supporting gold buyers, persistent economic issues in China and declining gold demand in India are likely to create additional challenges for gold prices. In India, domestic prices have soared due to a rapid decline in the value of the Rupee, making gold purchases increasingly costly.
Looking ahead, the ADP Employment Change and the Fed Minutes will be crucial to gold ’s direction. The private sector is projected to add 140,000 jobs in December, following a 146,000 increase in November. Strong employment data coupled with a hawkish tone from the Fed could further suppress gold prices, which do not bear interest.
On the technical front, gold is currently holding above its 50-day Simple Moving Average at $2,646. To continue its recovery from last month’s low of $2,583, gold buyers will need to overcome resistance at $2,665. If this is achieved, further resistance is expected at $2,693 and the $2,700 level. Conversely, a decline below the 50-day SMA could see prices testing levels around $2,634 and $2,615, with further support found at the December 30 low of $2,596.
