Gold Market Update: Price Movements and Key Economic Signals!

Gold prices bounced between $2,595 on December 30 and $2,665 on January 3. The price of gold rose during the new year due to increased investments and worries about the Chinese economy after disappointing manufacturing data came out. It hit a high of $2,665 because a report showed US manufacturing was better than expected. However, gold ended the week with a slight drop of 0.71%, closing at $2,640 on Friday, but overall, it was up 0.80% for the week.

Key Economic Data:
– The US ISM manufacturing index went up to 49.3 in December, which is a nine-month high, improving from November’s 48.4, and was better than the expected 48.20.
– In contrast, other global manufacturing reports were weak. China’s Caixin manufacturing PMI was 50.5 (expected 51.7), Eurozone manufacturing PMI came in at 45.1 (expected 45.20), and UK’s PMI was 47 (expected 47.30).
– In the US, initial jobless claims dropped to 211K (predicted 221K) from 219K, showing fewer people are filing for unemployment benefits.

Upcoming Important Reports:
Next week, we are looking forward to several US reports, such as the services PMI, factory orders, job openings, and unemployment data. We’ll also see reports from China on services and inflation, and in Europe, there will be updates on manufacturing and retail sales.

US Dollar and Yields:
Ten-year US yields fluctuated between 4.50% and 4.63%, with a Friday close at 4.60%. Similarly, two-year yields were around 4.387%. The US Dollar Index hit a one-year high at 109.53 but ended the week slightly lower at 108.94, still up about 0.90% for the week. Meanwhile, emerging market currencies are facing pressures, and the Chinese Yuan has weakened against the US dollar.

Shanghai Gold Premium:
The premium for gold in Shanghai rose to $12.48 on January 3, a significant shift from a discount of $13.80 the previous day.

Outlook:
Traditionally, January is a good month for gold. However, gold prices may move within a range as we await crucial US economic reports. Concerns about the economies in China and Europe, combined with weaker emerging market currencies, could support gold prices, while strong US yields and a firm dollar might keep prices in check. Support levels for gold are $2,633, $2,623, $2,600, and $2,581, while resistance is at $2,665 and $2,700. It might be a good time to buy if prices dip, with a stop-loss below $2,600 for a chance to reach $2,700 if US data surprises on the downside.

(Disclaimer: The insights and opinions expressed here are the author’s own and do not necessarily reflect the views of thell.news)