The gold market is down on Tuesday as some technical selling pressure takes hold of the market following Monday’s blow-off top. The metal may simply be due for some selling after recent strength drove prices to fresh all-time highs.
JOLTS Report Signals Labor Market Concerns
The latest JOLTS report from the Labor Department may have also left more room for the Fed to leave rates unchanged for the time being. The JOLTS report, which is a widely watched employment report, showed that job openings declined on the last day in October to 8.73 million. This figure was a miss for expectations, which were looking for job openings to remain around the 9.31 million level. Less total openings could be a sign that the labor market is beginning to crack, and the 8.73 million figure is the lowest reported number since May of 2021. The data will likely keep the Federal reserve on hold when it meets next week and could even bolster chances of a Fed rate cut in March.
Gold Bulls Eye Potential Fed Rate Cut as JOLTS Data Weakens Job Market
If the likelihood of a rate cut does rise in the weeks and months ahead, the gold bulls may have fresh ammunition to drive prices even higher. It will be interesting to see what, if anything, the Fed does do in the coming months. Although the labor market and economy may continue to slow, the central bank may want to try to keep rates elevated as inflation still remains way above its desired 2% annual target. On the other hand, with a Presidential election quickly approaching next year, the Fed may also want to try to boost the economy and could begin cutting rates, even aggressively, in the first quarter of next year. At this point, the gold market may be set to move higher regardless of whether the Fed starts cutting or not. The only thing that may derail gold at this time is if the Fed elects to continue hiking interest rates. This seems unlikely, however, and the Fed may just stick with its “higher for longer” plan of attack regarding interest rates.
Market Dynamics: Gold’s Potential Path to $2,500 or $3,000 Unveiled
With gold having already cracked into fresh all-time high territory, the sky is the limit on how high prices may go. With zero chart-based resistance in front of the bulls, the metal could easily rocket higher to $2,500 or even $3,000 per ounce. Of course, the market may need some selling and filling in on the charts before making a sustainable run higher from current levels. The current multiple wars taking place, as well as the inflation and rate situation, may keep the gold bulls well motivated to keep the market moving higher in price. Price action on Monday could point to a short-term top, however, and the coming days or even weeks may be filled with sideways price action and little movement of significance. Any further erosion in economic data may also inspire the bulls, as it may lift the chances of a Fed reversal early in the new year.
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