Spot gold continued to rise as the US December "small non-farm" was lower than expected. As of now, the gold price is 2659.97.
The US December "small non-farm" ADP employment number was 122,000, lower than the market expectation of 140,000, the lowest level since August 2024.
Last week, the number of initial jobless claims was 201,000, the lowest since the week of February 17, 2024.
Fed Governor Waller: Support further interest rate cuts this year. It is not believed that the new government will implement a "harsh" tariff policy, and it is expected that tariffs will not have a significant impact on inflation.
Minutes of the December meeting: It is at or close to the point of slowing down the pace of interest rate cuts, and some officials believe that it is necessary to keep the pace in December. Inflation will continue to slow, but the policies of the new government may increase the risk of price pressure.
According to CNN, four people familiar with the matter said that Trump is considering declaring a national economic emergency to provide a legal basis for the imposition of a large number of general tariffs.
The minutes of the Fed meeting released overnight were slightly hawkish, suggesting that it is appropriate to slow down the pace of easing. Gold rebounded from a lower level during the day and eventually closed higher again.
The US dollar index continues to rise, and I think this will continue to have an impact on gold prices. In addition, US President-elect Trump may declare a national economic emergency after returning to the White House so that he can impose more tariffs on allies, causing market nerves to be tense. The performance of employment data is mixed. The US ADP employment data in December fell more than expected, but the latest initial jobless claims also fell more than market expectations. However, gold did not react too much to this, perhaps still preparing for the more important December non-farm data.
From a technical point of view, gold has not broken the current consolidation pattern, but after recovering the 50-day SMA of $2,648, the trend is biased to the upside. If it can break through and stabilize above $2,660, it will lay the foundation for challenging the $2,700 mark, and then it is possible to further test the resistance of $2,726. On the downside, if gold prices fall back and close below the 100-day SMA of $2,628, it is likely to push it down quickly and test the support of the $2,500 mark, and the decline may even extend to the 200-day SMA of $2,498.
After a poor performance at the end of 2024, silver returned strongly in early 2025. There is good reason to suspect that funds deliberately depressed gold and silver prices at the end of 2024 to "draw the chart" and influence the annual closing price. Given the steady rise of gold and silver throughout the year, this strategy seems reasonable. With the arrival of the new year, the gold and silver bull markets will regain momentum and may exceed last year's performance.
Although silver broke below the uptrend line on Dec. 18, it appears to have formed a double bottom and rebounded from the downtrend line that started in May. To confirm that the sell-off is indeed over and that silver's rally is ready to resume, I would like to see it close above the uptrend line, effectively negating the Dec. 18 crash. Subsequently, if silver closes above the $32-33 resistance zone, it would strengthen the bullish case. If silver can sustain a close above this key level, it should pave the way for a rally to $35, $40, and even higher levels.
While silver has been stagnant since late October, there is reason to believe that this is just another consolidation phase, similar to what happened a year ago and last summer. If history repeats itself and a breakout occurs, silver could rally strongly again, just as it did during previous consolidation periods. I keep a close eye on gold because it plays an important role in influencing silver prices along with copper. Currently, COMEX gold futures are trading in the $2,550-2,800 range. To confirm that the gold bull market has resumed, a decisive high volume close above the triangle pattern and the $2,800 resistance level is necessary. Such a breakout could push gold prices to $3,000 or even higher in the short term, which is also very bullish for silver.
In addition to gold, I am also keeping a close eye on copper prices as it has a significant impact on silver's performance. For silver to gain meaningful bullish momentum, copper prices may need to rise strongly. Currently, copper prices are hovering around its key $4 support level, and a rebound from here would be a positive sign. If copper prices can successfully rebound, the next key test will be the $5-5.2 resistance zone.
There is definitely a tug-of-war between gold bulls and bears at the moment. Trade concerns may support gold, but on the other hand, the cooling of interest rate cut expectations brings resistance to gold. In fact, the bullish case for gold in 2025 has undoubtedly weakened significantly since Trump's victory. This is further evidenced by Goldman Sachs lowering its 2025 gold price target from $3,000 previously.
However, I would not rule it out so quickly. Global geopolitical situations and rising risks pose a threat, and if these risks intensify with the conflict in the Middle East, $3,000 gold is still possible. Another possible avenue of support remains central bank purchases. Many central banks believe that gold purchases will continue until 2025.
Technically, since spot gold reached a low of $2,582 on December 19, the trend has set higher highs and lower lows. Monday's daily close, while maintaining an overall bullish structure, closed with a long lower shadow, laying the foundation for gold to move higher again. However, overall fundamentals may curb gains, and immediate resistance is expected to be at $2,650 before $2,664 and $2,674 come into focus. But if gold moves down first, it may find support at $2,624 and $2,614, and breaking these levels may test $2,600 again.
Yesterday, gold rose, recovering two days of losses. As is typical in a sideways market, prices reversed again and recovered lost ground, retesting last week's high of 2,662/65, and the high of the day appeared again. There is no sign of the beginning of a trend, so we can only accept volatility, and prices always reverse. Moving averages and Fibonacci levels are useless in this situation. The small resistance level of last week's high of 2,662/65 is the key to today's direction. Bulls need to break through here to target 2,672/75, and then the 3-month trend line resistance at 2,688/92.
But a failure to break last week’s high at 2662/65 could see prices quickly reverse again to 2642. Minor support is at 2630/35. A break below 2630 could target 2623/25 and possibly even this week’s low at 2614/16. There is a very short-term trendline at 2607/10 that could offer support today, but bulls need to keep stops below 2604. We have to wait for a breakout of the sideways pattern, but I expect that to take some time, possibly a few weeks.