US private sector employment experienced an unexpected monthly decline, while weakness in the dollar increased and government bond yields fell further. All these developments helped the precious metal rise to a one-week high and gold posted its third straight gain on Wednesday. Analysts’ market comments and gold price predictions cryptocoin.com compiled for our readers.
“US NFP report will be decisive for gold price”
On Wednesday, US private sector jobs showed a loss of 301,000 jobs in January. The gold price rose after data showed the biggest drop since the start of the pandemic. Economists polled by The Wall Street Journal estimated a 200,000 increase. All eyes are now on the US NFP report to be released on Friday. Lukman Otunuga, head of market analysis at FXTM, comments on the impact of the US jobs data, which will be released on Friday, on the gold price:
While gold will continue to rise, taking advantage of the dollar’s weakness, its short-term outlook remains influenced by Friday’s US jobs report. A strong jobs report showing solid jobs and wage growth could bolster hawkish Fed expectations and push gold prices down as the dollar regains momentum. However, if the jobs report is disappointing, this could give the yellow metal some relief and a move towards $1,831.
Jeff Wright: I don’t expect gold to rise much higher
Jeff Wright, chief investment officer of Wolfpack Capital, evaluated geopolitical developments and their effects on the precious metal price as follows:
Gold price hovers above $1,800 and there is a meaningful safe-haven relevance to market volatility with the Ukraine crisis to support this level. I don’t expect gold to rise much higher. Instead, I see a measure of support at $1,750 on any pullback.
Bullion was bustling so far in 2022. However, the precious metal remains in a relatively tight range with $1,850, which serves as a resistance area against the possibility of the Federal Reserve starting a rate hike. Peter Grant, vice president and senior metals strategist at Zaner Metals and Tornado Bullion Solutions, makes the following predictions:
More definite signs of economic weakness may dampen the Fed’s desire to control inflation. This will set a more positive tone for gold above $1,800 and focus will return to last week’s high at $1,853.78. However, at this point the focus is on Friday’s jobs report.
Pablo Piovano: Gold price capped around $1,810
Open interest on gold futures markets resumed its downtrend once again on Wednesday, this time shrinking by nearly 3,000 contracts, according to advanced figures from CME Group. Along the same lines, volume dropped by about 8.2k contracts, adding to the recent negative.
Gold prices moved higher for the third consecutive session on Wednesday. However, market analyst Pablo Piovano states that this move is supported for the short term, as indicated by the declining fund of open interest and volume, although gains appear limited around $1,810 for now.
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