Last Friday, spot gold gained $1 and closed at $2633. However, gold prices were down about 0.40% for the week, marking the second week in a row of losses. The price of gold varied, reaching as low as $2613 on December 6 and as high as $2657 on December 4.
U.S. Job Market Gains
In the U.S., employers added 227,000 jobs, which was better than the expected 220,000. The numbers from October were also revised up, adding a total of 56,000 jobs over the two months. Average hourly pay increased by 0.4% compared to last month and was up 4.2% from last year, beating expectations of 0.3% and 3.9% respectively. However, fewer people were participating in the workforce, dropping to 62.5%. The unemployment rate went slightly higher to 4.2% from 4.1% last month. Despite these numbers looking somewhat positive, another survey showed a loss of 355,000 jobs, compared to a loss of 368,000 in October.
Consumer Sentiment and Economic Indicators
Consumer sentiment improved slightly, surpassing expectations, while one-year inflation expectations rose to 2.9%, which was higher than the predicted 2.7%. Earlier this week, the ISM services index, which tracks service sector growth, came in at 52.1, failing to meet forecasts of 55.7.
Trends in Gold ETFs and Geopolitical Situation
Global gold ETFs saw slight increases, but overall, there was a net outflow this month. Tensions remain high in geopolitics, with Russia planning to deploy nuclear-capable missiles and protests in Georgia against the government ramping up.
Dollar and Yields Movements
U.S. bond yields went down after the job report, leading to expectations that the Federal Reserve may cut interest rates further in their next meeting on December 18. The ten-year bond yield closed at 4.15%, showing a small decrease. The U.S. Dollar Index ended with a gain of about 0.25%.
Looking Ahead
Next week, everyone will be watching U.S. inflation data closely, as well as China’s economic figures. The European Central Bank is expected to lower interest rates on December 12. Without any significant changes in geopolitics, gold might dip initially due to positive job reports and market confidence. Still, risks from global tensions and inflation data could influence prices. Currently, support for gold is seen at $2613, $2595, and $2575, while it needs to break the resistance level of $2675 to see any upward movement.
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