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Gold’s recovery comes on the back of the latest US Labour Department data, which showed that non-farm payrolls rose by 223,000 jobs for the month of December 2022.
Additionally, US services industry activity contracted for the first time in nearly three years in December, offering evidence that inflation was abating.
“We did see kind of a Goldilocks number for the jobs report this morning … that is we saw a headline jobs number slightly higher than expectations, but we did see a slowdown in wage growth,” David Meger, director of metals trading at High Ridge Futures, told Reuters.
“I don’t really think we saw a lot of information here to change the direction of the Fed, and clearly the market is more focused today on the idea that we are getting closer to the end of those fed rate hikes.”
Boosting bullion’s performance, the dollar index was down 0.7%, while benchmark Treasury yields were close to their lowest in nearly two weeks.
Jim Wyckoff, senior analyst at Kitco Metals, said gold could continue to trade sideways to higher in the first quarter, having seen new interest on the long side from hedge funds at the start of the New Year.
(With files from Reuters)
