On January 10, spot gold experienced narrow fluctuations in the Asian early morning session, currently trading around $2,670 per ounce. On Thursday, driven by safe-haven demand, the gold price rose to a four-week high, reaching an intraday peak of $2,678.17 per ounce, and eventually closed at $2,670.19 per ounce, marking an increase of approximately 0.33%, rising for the third consecutive trading day. Technically, after breaking recent highs, gold prices may continue to test the resistance near the upper Bollinger Band at $2,702.76 per ounce.
Safe-haven sentiment pushes gold higher
Several Federal Reserve officials expressed caution regarding further interest rate cuts on Thursday, providing support for gold. Additionally, with Trump's imminent inauguration, uncertainty about U.S. economic policies further boosted safe-haven demand. UBS analyst Giovanni Staunovo noted, "Safe-haven demand somewhat offsets the pressure on gold prices from the strengthening dollar and rising yields."
The US Dollar Index continued its upward trend on Thursday, reaching a peak of 109.37, with an increase of about 0.17%, marking its third consecutive day of gains. This to some extent limited further gains in gold prices.
Trump's policies increase market uncertainty
Concerns over Trump’s policies continue to grow. CNN reports that Trump may declare a national economic emergency to provide legal grounds for imposing tariffs. Furthermore, impending new U.S. sanctions on Russia could further impact geopolitical dynamics, bolstering safe-haven demand for gold.
Non-farm data becomes market focus
Investors are turning their attention to the U.S. non-farm payroll data to be released on Friday evening, Beijing time. A Reuters survey indicates that December non-farm payrolls may increase by 160,000, lower than the 227,000 increase in November. FX Street's senior analyst Joseph Trevisani mentioned that recent economic data has generally exceeded expectations, and if the non-farm data is strong again, it will signal that the economy has not cooled down, further exacerbating inflation pressure.
Meanwhile, the initial reading of the January University of Michigan Consumer Sentiment Index will also be released on Friday, and investors need to closely monitor its impact on the market.
The Fed’s attitude remains cautious
Recent statements from Federal Reserve officials have been cautiously inclined. Philadelphia Federal Reserve President Harker stated that while a rate cut is still expected, there is no need to rush in the current economic uncertainty. Boston Fed President Collins emphasized that the Federal Reserve must cautiously approach future rate cuts.
Kansas City Federal Reserve President Schmid pointed out that as the economy approaches a neutral interest rate, the Fed does not need to further ease its policy. Federal Reserve Governor Bowman stated that last month's rate cut was the "last step" in policy adjustment, and more economic data is needed to guide future moves.
Outlook for the future
The gold market continues to maintain an upward trend supported by safe-haven demand, but a strong dollar and rising yields could exert pressure on it. Investors need to closely watch the performance of non-farm data and consumer confidence indices, which will provide more clues for the Federal Reserve's policy path. Amid increased global economic and geopolitical uncertainties, gold may still attract safe-haven capital.
