On Thursday (January 9), spot gold continued its recent strong rally, reaching an intraday high of $2678.29 per ounce and closing at $2669.77 per ounce, up $8.38, or 0.32%. This marks the third consecutive trading day of gains for gold, as investors' demand for safe havens remains elevated.
Safe Haven Demand Boosts Gold Prices
The main driver of the market's risk-averse sentiment is the uncertainty surrounding the policies of incoming U.S. President Trump. CNN reports that Trump may declare a national economic emergency to provide legal grounds for imposing tariffs on allies and adversaries. Additionally, the long-term yield on UK government bonds has surged to its highest level since 1998 (above 5%), further exacerbating global investor concerns.
Despite the US dollar index rising 0.16% to 109.18 on the day, gold prices held firm, underscoring the strong support from safe haven demand. Meanwhile, the World Gold Council stated that gold ETFs backed by physical assets have experienced a net inflow for the first time in four years, bolstering market confidence.
Market Focuses on Non-Farm Data
At 21:30 Beijing time on Friday, the U.S. will release the December non-farm payroll report, with markets generally expecting an increase of 160,000 jobs, below the November increase of 227,000. Additionally, the December unemployment rate is expected to remain at 4.2%. Later, at 23:00, the preliminary January University of Michigan Consumer Confidence Index will be released, with market expectations of 73.8.
Analysts believe these two key economic data could have a direct impact on gold trends. If the data exceeds expectations, the dollar might strengthen further, potentially pressuring gold prices.
Gold Technical Outlook
Gold has been rising steadily recently, continuously reaching higher highs and higher lows, and has now significantly rebounded above the 50-day moving average ($2646 per ounce). Technical analysis indicates that if gold prices continue to strengthen, they may test the $2700 per ounce resistance level in the short term, followed by last December’s high of $2726 per ounce, and the historical high of $2790 per ounce.
On the other hand, if gold prices fall below the 50-day moving average, they might further test the support level of the 100-day moving average at $2630 per ounce. Breaking below this support could see prices retreat to $2600 per ounce, or even the 200-day moving average of $2500 per ounce.
Trading Strategy Recommendations
Prior to the release of the non-farm data, gold markets may predominantly oscillate. Investors should closely monitor U.S. economic data and the dollar's movement, while also using technical analysis to identify key points and adjust trading strategies flexibly to cope with potential market fluctuations. Gold, as a safe haven asset, remains an important choice for investors amid increasing global uncertainties.
