Overnight market review During the Asian session on Thursday (January 5), spot gold fluctuated within a narrow range and is currently trading around $1,855 per ounce, holding most of the overnight gains. Fears of a global recession and expectations of a slowdown in the Federal Reserve’s rate hikes continued to support gold prices this week. Wednesday’s data showed that the U.S. ISM manufacturing PMI was the worst performance since May 2020. U.S. bond yields continued their decline, helping Gold prices have risen for four consecutive sessions, however, job vacancies data showed that the U.S. job market is still very strong, gold bulls need to be vigilant.
Bart Melek, head of commodity market strategy at TD Securities, said: “We are looking at the possibility that inflation may have peaked, and if we see economic data that confirms that … that will keep gold on the upside and possibly approach 1865 Dollar.”
This trading day will usher in the “small non-agricultural” ADP employment data and changes in the number of initial jobless claims in the United States. Market expectations are relatively optimistic, which tends to support the US dollar and US bond yields, which may trigger a short-term correction in gold prices. Investors need to pay attention to the evening Data expectations for non-farm payrolls due on Friday.
Trading strategy suggestion: high short
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