FX.co ★ Gold Rebounds After Jobs Data

Gold experienced a modest increase of approximately 0.3% to surpass $4,490 per ounce, recovering from earlier declines. This rise was spurred by weaker-than-expected US labor data, which bolstered predictions of interest rate cuts by the Federal Reserve within the year. December's nonfarm payrolls increased by only 50,000, falling significantly short of projections, while the sharp drop in the unemployment rate to 4.4% indicated a stable employment landscape characterized by low hiring and firing rates. This environment advocates for reduced interest rates without implying severe stress in the labor market. As a result, demand for non-yielding assets grew, despite the US dollar maintaining relative strength, which capped potential gains. Geopolitical tensions continued to support the value of gold, particularly following the US's renewed actions and rhetoric concerning Venezuela and Iran. Additionally, structural factors helped sustain gold prices, as China's central bank prolonged its gold purchasing to 14 consecutive months, thereby tightening supply and allowing gold to preserve a weekly gain of approximately 3%.