Summary:
Gold rose as weak job data reinforced the belief that the Fed might have peaked in raising rates, causing the US dollar and Treasury yields to fall.
Gold prices gained as the US dollar and Treasury yields slipped after weak jobs data cemented expectations that the Fed may have raised interest rates as high as it will get.
US private sector added 150k jobs in Oct, below the 180k expected by economists, in part due to auto strikes. Wage inflation also cooled, pointing to labour market softening. The unemployment rate rose to 3.9%, the highest level since January 2022.
Traders are now pricing in a 95% chance that the central bank will leave rates unchanged in Dec compared to 80% before the data, according to the CME FedWatch tool.
Secretary of State Antony Blinken made a surprise visit to the occupied West Bank, where he met with Palestinian Authority President Mahmoud Abbas. Abbas said Hamas did not represent Palestinians last month.
Israel said it would press on with its offensive in Gaza despite appeal from many countries including the US for an immediate ceasefire to guarantee aid delivery to refugees.
Gold investment demand in the third quarter rose 56% from the previous year though that level was roughly a half of the 5-year average, the WGC report showed.
The precious metal breached above the psychological $2,000 threshold but that was followed by a correction, which has happened a third time since late Oct. Selling on the next rally is suggested.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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