Gold trades near $4,100, balancing safe-haven demand against a stronger US Dollar and rising rate-hike expectations following a stellar October payrolls beat.
October payrolls of 165,000 smashed the 65,000 estimate and unemployment fell to 4.1% from 4.2%, reinforcing expectations the Fed keeps rates higher for longer. Rate-hike odds for December rose to 79.6% from 72.8% per CME FedWatch, a clear dollar-positive, though some stabilisation in the Dollar was already noted by OCBC and a rebound in yields is not yet confirmed.
Gold rebounds to near $4,100 in early Asian trade on Monday after gapping lower on the strong October payrolls report (165,000 vs 65,000 expected). Speculation that Democrats will push to end the Iran war and oppose the $1.5 trillion defense budget lifts the metal, and OCBC sees safe-haven appeal returning. However, the rally is capped by the hawkish Fed implications of the jobs beat, with 79.6% December rate-hike odds, and price remains below the 100-day SMA at $4,200.
The strong October payrolls report (165,000 vs 65,000 expected) reinforced expectations of Fed rates higher for longer, which the article says could boost Treasury yields. That points to rising yields, though yields have recently been softer and continued to lend support to gold, leaving the direction mixed.
Gold prices recovered to near $4,100 in early Asian trading on Monday, supported by political speculation that Democrats will block a $1.5 trillion defense budget and seek to end the Iran war. However, gains remain limited as a robust October jobs report, which saw 165,000 positions added, pushed December Fed rate-hike odds to 79.6%.
The much stronger-than-expected October jobs report (165,000 vs 65,000 expected) lifted expectations that the Fed will keep rates higher for longer, which is supportive for the US Dollar.
Gold gapped lower after October payrolls came in at 165,000 versus 65,000 expected, but it clawed back above $4,100 as speculation grew that Democrats would push to end the Iran war and block the $1.5 trillion defense budget.
Resistance sits at the 100-day SMA at $4,200 and the Bollinger upper band around $4,225, while support is near $4,095, the Bollinger middle band at $4,065, and the lower band near $3,900.
The strong jobs data could boost Treasury yields by reinforcing expectations the Fed keeps rates higher for longer, though yields had recently been soft.