Gold is holding firm at just under $1,840 an ounce as the price looks to consolidate after its recent climb to its highest level for six months.
Today brings the latest non-farm payrolls data out of the US which will be another important reference point to see how the world’s largest economy is faring in the face of rising interest rates from the Federal Reserve and high inflation. The hope is that the jobs data will show that employment is still holding up sufficiently robustly to give the Fed more wiggle room when it next meets to decide on interest rates.
Recent comments from Fed officials point to further rate increases required, potentially up to 5%, to effectively curb inflation that while it may have peaked, still remains comfortably above the Fed’s 2% target. Given this macroeconomic backdrop, it seems remarkable that gold is still looking up and able to build on its impressive price recovery since the start of November.
The prospect of higher interest rates was a key factor in gold’s slide in the earlier part of 2022 yet with more rate hikes still likely, gold is testing levels last seen in June. This points to the broad uncertainty across markets with investors fearful of putting too much money in equities after a torrid 2022 while the spectacular collapse of FTX reminded everyone of the vulnerability of cryptocurrencies as an investment prospect. In the absence of stronger alternatives to place money, gold is proving to be a reliable home.
Rupert is a Market Analyst for Kinesis Money, responsible for updating the community with insights and analysis on the gold and silver markets. He brings with him a breadth of experience in writing about energy and commodities having worked as an oil markets reporter and then precious metals reporter during the seven years he worked at Bloomberg News.
As well as market analysis, Rupert writes longer-form thought leadership pieces on topics ranging from carbon markets, the growth of renewable energy and the challenges of avoiding greenwash while investing sustainably.
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