05/01/2024 – 15:54
The most liquid gold futures contract closed with a slight drop this Friday, the 5th, practically stable, amid uncertainty about the next steps of the Federal Reserve (Fed, the North American central bank), with investors divided between a payroll that showed job market resilience and a disappointing services purchasing managers index (PMI) reading.
On Comex, the metals division of the New York Mercantile Exchange (Nymex), gold scheduled for delivery in February 2024 was practically stable, at US$2,049.80 per troy ounce. During the week, however, gold fell 1.06%.
After the release of the payroll, the CME Group's FedWatch tool indicated a reduction in the chances that monetary easing will begin in March. The possibility, however, once again exceeded 70% after the Institute for Supply Management (ISM) pointed out that services fell short of expectations in December. In the midst of this back and forth, gold fluctuated between gains and losses throughout the day.
However, in TD Securities' view, regardless of when Fed rate cuts begin, traders are significantly underinvested in gold relative to historical analogues before a cycle of Fed cuts. “In fact, our analysis of Advanced positioning suggests that discretionary traders only marginally increased their net length in the metal as Federal Reserve Chairman Jerome Powell expressed a more dovish tone during the latest Fed meeting.”
The Canadian bank warns of the possibility of a break below US$2,025 per troy ounce, which would trigger large-scale liquidations.
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