Gold futures have surged over the past three trading sessions, climbing from a low of $2,624.60 on Monday to nearly $2,700 per troy ounce. As of 4:00 PM ET, the February contract closed at $2,691.70, reflecting a gain of $11.60, or 0.43%. This price level is the highest seen since December 13, 2023. Notably, this rise occurred despite modest strength in the U.S. dollar, with the dollar index up by 0.15% to 109.308.
Analysts attribute gold’s resilience to a combination of factors. UBS analyst Giovanni Staunovo noted that “safe-haven demand is modestly supporting gold, counterbalancing the downward pressure from a stronger dollar and higher interest rates.”
Adding to market uncertainty is the impending inauguration of President-elect Donald Trump. Sources suggest that Trump is considering declaring a national economic emergency to implement broad tariffs on both allies and competitors. Reuters reports that such tariffs could lead to trade wars and inflation, scenarios in which gold—often seen as a hedge against inflation—tends to perform well.
Compounding the market’s unease are recent labor market reports. The ADP private sector employment report for December showed an increase of 122,000 jobs, falling short of the expected 136,000 and a decline from November’s 146,000. This softer data has heightened anticipation for tomorrow’s key nonfarm payrolls report, which analysts expect will show 160,000 new jobs for December, a notable drop from November’s 227,000.
With these economic factors in mind, market attention is now focused on the nonfarm payrolls report, which could influence the Federal Reserve’s next monetary policy decision scheduled for January 29.
The central bank is widely expected to maintain its current interest rate range of 4.25% to 4.50%. According to the CME’s FedWatch tool, there is a 93.1% probability of rates staying unchanged at this level, down slightly from 94.7% the previous day and 88.2% a week ago. Looking further ahead, the tool indicates a 57.7% chance that the Fed will keep rates steady through the March FOMC meeting, up from 49.4% last week.
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