News

On Monday, December 2, spot gold opened the Asian market with slight fluctuations, currently trading at $2646.95 per ounce. Last Friday, gold prices experienced a modest rise, buoyed by a declining dollar and ongoing geopolitical tensions. However, November marked the largest monthly drop since September of the previous year, primarily due to profits taken following election outcomes.Spot gold climbed by 0.5% last Friday, reaching $260.26 per ounce, but for the week, it faced a dip exceeding 2%. This slump was precipitated by a sharp fall exceeding 3% in gold prices the previous Monday. Although gold attempted to rebound in the subsequent trading days, it struggled to reverse the preceding Monday's downturn. Investors are currently wary of additional downward risks to gold prices.In November, spot gold fell by 3.4%, marking the most significant monthly decrease since September 2023, as heightened "excitement" surrounding the dollar’s strength early in November hindered gold's upward momentum.The dollar index dipped to its lowest point in over two weeks last Friday; nevertheless, it still recorded a 1.8% rise for November, fueled by expectations of increased fiscal spending, elevated tariffs, and tightened border controls following November 5th developments.Gold is now facing significant pressure, as the potential for tariff hikes could spark inflation and prompt the Federal Reserve to adopt a more cautious approach regarding further interest rate cuts. Jim Wyckoff, a senior market analyst at Kitco Metals, mentioned that the method of implementing the promised tariffs remains unclear. However, he also noted that this uncertainty surrounding policies designed to combat illegal immigration, which could slow economic growth, could actually be beneficial for the gold market from a risk-hedging perspective.Analysts have pointed out that policies aimed at curbing illegal immigration could reignite inflationary pressures. Moreover, stronger-than-anticipated economic data has increased speculation that the Federal Reserve might slow the pace of rate cuts as the economy approaches neutral interest rates.The CME FedWatch Tool indicates that traders consider a 66% probability of the Federal Reserve lowering rates by 25 basis points during its December 17-18 meeting, whereas the likelihood of another rate cut in January is a mere 17%.Ole Hansen, the chief commodity strategist at Saxo Bank, emphasized in a report that global uncertainty continues to drive demand for gold as a safe-haven asset. The next significant economic indicator from the United States will be released on Friday, featuring the November employment report. Investors are keenly awaiting this report for insights regarding the health of the U.S. economy, which may influence interest rate trajectories in the coming months.A series of robust economic indicators, including a strong employment report for September, has raised concerns that excessive rate cuts by the Federal Reserve could lead to a rebound in inflation, potentially undoing the two years' worth of progress in curbing price increases.Despite generally welcoming evidence of a strengthening economy, investors are cautious that a strong non-farm payroll report scheduled for December 6 could further diminish expectations for a Fed rate cut and heighten inflation fears. Angelo Kourkafas, a senior investment strategist at Edward Jones, stated that the non-farm payroll data “will provide a clearer potential trend, which is crucial given the numerous debates and uncertainties surrounding the Federal Reserve's interest rate path.”Earlier in November, Federal Reserve Chairman Jerome Powell remarked that the Fed is not in a rush to reduce interest rates, citing a robust labor market and inflation remaining above the 2% target. Sameer Samana, a senior global market strategist at Wells Fargo Investment Institute, noted that the Fed "is beginning to loudly question how much easing policy is still needed in the economy, especially concerning the labor market." Anthony Saglimbene, chief market strategist at Ameriprise Financial, mentioned that economists surveyed by Reuters expect a gain of 183,000 jobs in November. If the report exceeds expectations significantly, it could shake confidence in actions taken in December, potentially leading to a sharp decline in stock markets. “If the employment report is stronger than expected, there might be some selling pressure in U.S. markets.”In addition to the non-farm payroll report, various economic indicators will be released this week, including the U.S. November ISM Manufacturing PMI data, October JOLTs job openings, November ADP employment changes, the November ISM Non-Manufacturing PMI, and October trade balance. Moreover, several Federal Reserve officials, including Chair Powell, are scheduled to deliver speeches this week, which investors should monitor closely.Specifically, the U.S. November ISM Manufacturing PMI data will be published on Monday, which will also feature speeches from Federal Reserve Governor Waller and New York Fed President Williams. Investors need to remain attentive to related geopolitical developments.The latest insights from KITCO indicate a decrease in bearish sentiment among Wall Street analysts, with many leaning towards a neutral or bullish outlook, whereas the majority of retail investors appear to be optimistic about future trends.From a technical perspective, last week’s movements in gold prices resemble a bearish “flag” pattern. Investors should be cautious of the possibility that gold may revisit the 100-day moving average, which currently acts as support around $2575. A breakdown below this support could lead to a further test of the 200-day moving average around $2435.On the upside, resistance is noted near the 55-day moving average at approximately $2662.46. If gold prices maintain stability above this level, it would diminish the bearish signals for the near future.