The gold price remains above $1,900, around $62 per gram, while markets await the US inflation data that will be released on Wednesday. So far, bullion has been resilient to rising rates and the recent hawkish rhetoric of central banks. Investors continue to buy gold, and there is now a solid support zone at $1,890 – 1,900 per ounce.
Focusing our attention on the recent macroeconomic data, the US Bureau of Labor Statistics last Friday released the non-farm payrolls for June and – for the first time since April 2022 – the data missed expectations. Analysts had forecast growth of between 225k and 230k job places, while the official data were lower by almost 10% (precisely at 209k). Moreover, previous months’ figures were revised: May numbers were cut from 339k to 306k, while April data was down from 294k to 217k (-77k).
Despite this, expectations for the Federal Reserve’s decision on rates in its next meeting have remained unchanged. According to the CME FedWatch Tool, over 90% of investors are betting on a new rate hike, but this “raise” could be the last one. Indeed, there is little chance of further rate increases in the final months of 2023 (even if for the first “cut”, investors will have to wait until the beginning of 2024).
In other words, the gold market is facing a challenging scenario, but expectations for dovish tones from central banks in 2024 solidly support the price.
Carlo is an external market analyst for Kinesis Money. With a credential background in Economic Finance and International Exchange (MA), Carlo’s critical analysis of gold and silver markets’ performance is frequently quoted by leading publications such as Forbes, Reuters, CNBC, and Nasdaq. This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.
