The new year will be full of uncertainty as the Federal Reserve tries to rotate and tighten its monetary policies. At the same time, the threat of inflation continues to grow, meaning real interest rates will remain low and in negative territory. Commerzbank’s Daniel Briesemann notes that after the FED meeting minutes and ADP data last night, the gold price’s rise at the beginning of the session reversed and was negatively affected. Daniel Briesemann’s comments on the latest developments cryptocoin.com compiled for our readers.
“FOMC Minutes ignited the air and gold retreated”
“Gold is under pressure after Fed meeting minutes,” Daniel Briesemann says, adding that the US labor market showed it was doing exceptionally well at the end of last year, adding 807,000 new jobs were created in December. Stating that this data is almost twice what the Bloomberg consensus expects, the analyst makes the following assessment:
Rather than responding negatively to the data, gold climbed to $1,830 for a while as the dollar still depreciated. ADP’s figures have not always been a reliable indicator of past official US labor market data. Therefore, it should not be seen as a one-to-one prediction for tomorrow’s data.
According to Daniel Briesemann, the Fed meeting minutes ignited the mood in the evening gold market, causing the gold price to drop to $1,800. The analyst states that the minutes are interpreted as hawkish and points to the possibility of earlier and faster rate hikes thanks to the strengthening US economy and high inflation, and explains the effect as follows:
Yields on ten-year US Treasuries rose in response to a nine-month high of 1.73%, pushing the gold price down.
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