Gold prices remained stable this week, consolidating gains from early November that drove the price back above $1750 per troy ounce (oz). Silver has continued to rise, climbing 3% in the last five trading days and 14% for the month, with the gold to silver ratio (GSR) decreasing to 81.
Gold and silver, which have staged spectacular rallies since their lows in early November, have likewise traded in a tighter range during the last two weeks, albeit silver’s ongoing outperformance bodes well for the sector.
A push beyond $1800 oz is key to maintaining the present upward trend, but if it occurs, gold is expected to rise considerably higher, potentially reaching $1880 oz.
The US Federal Reserve declared that it may soon need to pivot, or at the very least soften the severity of the interest rate rises it has implemented this year in an attempt to limit inflation. According to the FED minutes, the risk of a US recession next year is nearly “as likely as the base case.” The USD fell strongly as a result of this disclosure, and the US PCE print next week will be closely watched.
As attention switches to next week’s highly anticipated November jobs report from the United States. On Friday, the US Bureau of Labor Statistics will release November labour market data. Nonfarm Payrolls (NFP) are expected to fall by 30,000 after increasing by 261,000 in October. A negative print is likely to put pressure on the US Dollar and pave the way for positive gold movement ahead of the weekend.
A weak jobs data might confirm a lesser rate hike and possibly revive hopes for a policy shift next year. Such a market judgement should drive US T-bond yields to fall considerably, allowing Gold to maintain its positive momentum. A positive NFP surprise, on the other hand, should have the opposite effect on financial markets, causing the gold price to fall.
Domestic Gold and Silver prices need to sustain above 54500 and 64500 respectively to continue its bull run.