Gold prices see narrow fluctuations internationally as investors await key data, while cautioning against holiday liquidity traps.
On Friday, December 23, international gold prices fluctuated narrowly in quiet trading, with cautious traders awaiting the release of US PCE data later in the day to weigh the prospects of a Federal Reserve interest rate hike. Due to low market liquidity before the Christmas holiday, less noteworthy news often triggers strong price movements. As of 3:25 PM Beijing time, spot gold rose 0.25% to $1796.91 per ounce; the COMEX gold futures contract rose 0.51% to $1804.5 per ounce; and the US dollar index fell 0.09% to 104.305. US November PCE data will be released at 9:30 PM Beijing time. Gold is considered a hedge against inflation and economic uncertainty, but higher interest rates increase the opportunity cost of holding gold bars because it does not pay interest. Brian Lan, managing director of Singapore-based trader GoldSilver Central, said: "If the data shows inflation is contained, gold will be boosted, which could boost expectations that the Fed will slow interest rate hikes." Lan added, "I think gold prices will fluctuate less next year." Gold prices fell more than 1% overnight after US economic data highlighted the country's economic rebound was faster than previously expected, boosting the dollar and potentially putting the Fed on a more aggressive path to fight inflation. Meanwhile, data released overnight also showed that the increase in initial jobless claims in the US last week was lower than expected. Jeffrey Sica, CEO of Circle Squared Alternative Investments, said: "The economic data we're seeing suggests that a high-interest-rate environment is likely to persist for longer." With the Fed raising interest rates and gold potentially attracting some funds from the stock market in early 2023 supported by safe-haven trading, "it's like driving with the brakes on—gold prices will rise." Ilya Spivak, global macro head at Tastytlive, said: "The market is digesting yesterday's data release. Due to low market liquidity before the Christmas holiday, we've seen a strong move on not particularly noteworthy news." Independent analyst Ross Norman highlighted the issue of year-end accounting settlements or pre-positioning for the New Year's peak. "Given that so many market participants are absent for the holiday season, it's dangerous to overinterpret gold price movements now...and thin markets tend to be prone to exaggerated moves on small volume."
Time:
2022-12-24 16:31
On Friday (December 23), international gold prices fluctuated narrowly in quiet trading, with cautious traders awaiting the release of US PCE data later in the day to weigh the Federal Reserve's interest rate hike outlook. Due to low market liquidity before the Christmas holiday, even less noteworthy news often triggers strong movements. At 3:25 PM Beijing time, spot gold rose 0.25% to $1796.91 per ounce; the COMEX gold futures contract rose 0.51% to $1804.5 per ounce; The US Dollar Index (104.3235, -0.0604 , -0.06% ) fell 0.09% to 104.305.
The US November PCE data will be released at 9:30 PM Beijing time. Gold is considered a hedge against inflation and economic uncertainty as a hedging tool, but higher interest rates increase the opportunity cost of holding gold bars because it does not pay interest.
Brian Lan, Managing Director of Singapore-based trader GoldSilver Central, said 示 “If the data shows inflation is contained, gold will get a boost, which could boost expectations that the Fed will slow interest rate hikes.” Lan added, “I think gold prices will fluctuate less next year.”
Gold prices fell more than 1% overnight after US economic data highlighted the country's economic rebound was faster than previously expected, boosting the dollar and potentially putting the Fed on a more aggressive path to fight inflation. Meanwhile, data released overnight also showed that the increase in initial jobless claims in the US last week was lower than expected.
Jeffrey Sica, CEO of Circle Squared Alternative Investments, said: “The economic data we're seeing suggests that the high-interest-rate environment is likely to persist for longer.” With the Fed raising interest rates and gold potentially attracting some funds from the stock market in early 2023 supported by safe-haven trading, “it's like driving with the brakes on—gold prices will rise.”
Ilya Spivak, global macro head at Tastytlive, said: “The market is digesting yesterday's data release. Due to low market liquidity before the Christmas holiday, we saw a strong move triggered by news that wasn't particularly noteworthy.”
Independent analyst Ross Norman highlighted the issue of year-end accounting settlements or pre-positioning for the New Year's peak. “Given that so many market participants are absent for the holiday season, it's dangerous to overinterpret gold price movements now… and thin markets tend to be prone to exaggerated moves on small volumes.”
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