Gold Prices Rise Slightly
Last Friday, spot gold continued its volatile trend, closing at $2633.02 per ounce, up by 0.05%. Market sentiment was influenced by U.S. non-farm payroll data, China's central bank increasing gold holdings, and geopolitical tensions. Although the U.S. added 227,000 non-farm jobs in November, beating the market expectation of 200,000, the overall data still indicates a gradual slowdown in the labor market, providing more policy room for the Federal Reserve's potential rate cut in December.
Non-Farm Data and Fed Rate Cut Expectations
The unexpected growth in non-farm jobs initially pressured gold prices downward in the short term. However, private sector job numbers were slightly below expectations by about 9,000, further strengthening market expectations for a Fed rate cut. Currently, traders believe there is an 85% probability of a 25 basis point rate cut by the Fed at its December meeting, up from 72% before the non-farm data release. Chicago Fed President Goolsbee stated that future economic conditions will determine the pace of rate cuts, and he anticipates the Fed may find a policy equilibrium by the end of next year.
China's Central Bank Increases Gold Holdings Highlighting Reserve Strategy
Data from December 7 shows China's central bank increased its gold holdings for the first time in six months, by 160,000 ounces, bringing the total to 72.96 million ounces. This move is interpreted by the market as reinforcing the strategic importance of gold as a diversification tool for foreign exchange reserves amid rapidly changing international circumstances. As external uncertainties increase, China's gold purchases may continue to support gold prices.
Geopolitics and Future Market Focus
Geopolitical turbulence further influenced gold market sentiment. Events such as Syrian opposition forces seizing control in Damascus and the ongoing martial law tensions in South Korea provided support for safe-haven demand. This week, the U.S. November CPI data is set to be released, and market expectations for Fed policy direction may adjust again.
Under the combined influence of non-farm data and central bank gold purchases, the gold market remains driven by Fed policy and international developments. In the short term, bullish sentiment is expected to continue, but the market's focus will shift to the upcoming U.S. inflation data, which may set the tone for future gold price trends.
