Gold has climbed above $1,800 an ounce to trade near its highest level in five months. The precious metal has benefited from a slightly weaker US dollar and expectations that the Federal Reserve will slow its rate of interest rate increases over the coming months.
Today brings the latest jobs data out of the US and after yesterday’s huge gains, gold and indeed markets more broadly are fairly static awaiting these employment figures. Strong numbers that point to a healthy US economy will give the Fed more bandwidth to continue its aggressive stance against stubbornly high inflation while any downside surprises will increase fears that this Fed aggression will tip the world’s largest economy into recession.
The fact that gold has been able to make significant gains in November and then carried that momentum into December illustrates the depth of support that has built up for the metal. The Fed is still after all almost certain to implement another interest rate hike later this month, which will increase the appeal of interest-paying assets to the detriment of gold.
The correlation therefore between gold’s gains and the shockwaves pulsing through the crypto industry following the collapse of FTX points to investors seeking out the age-old haven asset.
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