Gold futures remain under pressure, led by better-than-expected employment data and a lack of follow-through on a U.S. credit rating downgrade. If you remember, in 2011, the economy was still struggling to find its footing after the fallout from the financial crisis. Unemployment was hoovering above 8%, GDP was trending below normal levels, and credit spreads were wide, focusing on the "Pigs" (Portugal, Italy, Greece, and Spain). While in 2023, the economy shows signs of strength and resiliency, led by GDP at 2.4% and record-low unemployment rates.
It took Friday's surprise miss on payroll data indicating 187,000 jobs created versus 200,000 expected, which helped Gold find its footing and recover from its recent decline. Will one miss be enough to stop the Fed's aggressive stance on interest rate hikes? We will have to wait and see. Tuning into next week's economic data, we will have another round of inflation readings with CPI on Thursday and PPI on Friday.
Gold futures bounced off the 200-Day moving average at 1957.7 as traders repositioned for a "Fed Pivot." If we see CPI and PPI moderate around expected levels next week, that should clear the way for another assault on $2000/oz. The market must punch through resistance levels at $2025/oz to make a run for all-time highs.
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