The US economy is poised to continue its growth trajectory with the anticipated creation of 160,000 new positions in December, as per the latest Non-Farm Payroll (NFP) report. This forecast comes amid expectations that the unemployment rate will remain steady at 4.2%, signaling a stable job market. In a related development, US-based employers announced a reduction in job cuts, with 38,792 layoffs in December, marking a significant 33% decrease from the 57,727 cuts reported in November.
Meanwhile, gold prices have experienced a notable recovery, trading at their highest levels since mid-December. The precious metal is comfortably above $2,670, moving closer to record highs in the $2,726 price zone. The benchmark 10-year US Treasury bond yield has corrected lower from a multi-month high it touched above 4.7% on Wednesday, contributing to the bullish sentiment surrounding gold.
In recent trading sessions, spot gold has been on an upward trajectory for three consecutive days, hitting $2,678.16 per troy ounce during European trading hours. This upward movement is supported by the technical indicators which show positive momentum. The Momentum indicator is trending higher, while the Relative Strength Index (RSI) has retreated modestly from near overbought levels.
Technical analysis further reveals that the 20 Simple Moving Average (SMA) is advancing beyond the longer-term averages. Notably, the 100 SMA is approaching the 20 SMA with a bullish slope from below. On the other hand, the 200 SMA stands directionless at $2,645.98, providing support to current gold prices.
The XAU/USD pair has posted a higher high and a higher low for a third consecutive day, extending gains beyond all its moving averages. This pattern suggests that gold may continue its upward momentum in the near term. The 4-hour chart analysis indicates that XAU/USD is well-positioned to extend its advance.
As gold prices rise, Bitcoin US spot Exchange Traded Funds (ETFs) have recorded an outflow of over $568 million on Wednesday. This substantial outflow suggests a possible shift in investor preference towards traditional safe-haven assets like gold amid decreasing demand for cryptocurrencies.
The current market dynamics paint a picture of resilience in the US job market and a corresponding bullish trend in gold prices. The creation of new jobs and steady unemployment rates suggest underlying strength in the economy, which could further bolster investor confidence in gold as a stable investment vehicle.