94Ha Viewpoint
The US job market continued to show signs of slowing down, causing the futures gold price to rebound by 0.42% last Friday (December 6), but it was unable to reverse the decline in the first week of December, and fell 0.8% to $2,659.60 per ounce for the whole week. Given the impact of employment data and the wait for the much-watched inflation data to be released this week, most analysts and retail investors expect gold prices to rise or consolidate this week.
Spot gold prices rose slightly by 0.05% last Friday, closing at $2,633.23 per ounce, and the weekly decline narrowed to 0.66%.
The US employment report released last Friday showed that although non-farm employment increased by 227,000 in November, higher than the market expectation of 218,000, the unemployment rate unexpectedly rose to 4.2%, and the market originally expected the unemployment rate to remain at 4.1%. The accelerated increase in jobs has reduced the pressure on the US Federal Reserve to accelerate interest rate cuts. The rise in the unemployment rate indicates that there are subtle changes in the labor market environment.
Reuters quoted Allegiance Gold Chief Operating Officer Alex Ebkarian as saying: “We think non-farm payrolls are higher than expected, which may have a little negative sentiment for gold in the short term, but private payrolls are lower than expected, which once again confirms the possibility of the Federal Reserve cutting interest rates in the coming weeks.”
Jim Wyckoff, senior market analyst at information service provider Kitco, believes: “This employment report basically belongs to the ‘Goldilocks’ camp, that is, the data is not too hot or too cold. This shows that the Fed can continue to cut interest rates at the December meeting.”
Gold prices have risen 28% so far this year due to the support of the prospect of rate cuts, as lower interest rates will make non-yielding gold more attractive.
The market currently expects an 87% probability of a 25 basis point rate cut at the Fed’s December 17 and 18 meetings, up from 72% before the release of the employment data.
Kitco’s latest weekly gold survey shows that industry experts are once again half and half between bullish and consolidation, while retail investors have resumed their basic bullish sentiment.
Of the 12 analysts surveyed last week, five or 42% expect gold prices to rise this week, another five or 42% expect gold prices to continue to consolidate, and the remaining two or 17% are bearish on gold prices this week. A total of 116 retail investors were surveyed online, of which 70 or 60% are bullish on gold prices this week, 23 or 20% are bearish, and the remaining 23 or 20% are flat.
Analysis: The market may wait for geopolitical factors to push up gold prices
According to Jintuo, Rich Checkan, chief operating officer of Asset Strategies International, believes that non-farm payroll data should support the Fed’s expectations of a rate cut, which is good for gold. Therefore, he expects gold prices to rise slightly this week as gold prices are expected to usher in good news about rate cuts.
Christopher Vecchio, head of futures and foreign exchange at Tastylive.com, is pessimistic about the short-term trend of gold prices. He believes that after gold’s strong performance this year, there is still a risk of profit-taking.
Daniel Pavilonis, senior commodity broker at RJO Futures, noted that the market may be “hanging out” waiting for some geopolitical factors to push gold prices higher.
Kevin Grady, president of Phoenix Futures and Options, believes that the market is in a state of uncertainty as it waits for inflation data to be released this week and then waits for the new US government to take office. He expects that inflation data or the Fed’s decision to cut interest rates will not be a big surprise or cause big fluctuations in gold prices.
The United States will release the Consumer Price Index and Producer Price Index data for November on Wednesday (11th) and Thursday (12th), respectively.
