- Investors flow to precious metals and push gold to the highest level ever at $ 2,877 on Wednesday.
- The stocks are correct amid the reopening of Asia after the Chinese New Year holidays.
- Gold determines a gathering and enters its fifth day of the gains.
The price of gold (Xau/USD) is accumulated near 1 % on Wednesday, and it is on its fifth consecutive day of gains, which represents more than 2.5 % of the gains this week and reach its highest fresh levels over $ 2,877 while investors accumulate in The precious metal commodity. The most softening economic data from the United States (the United States), which supports the issue for more price of the Federal Reserve (Fed), as well as tariff fears that fade quickly, raises gold to higher levels day after day.
On the front of economic data, the calendar can become the additional back winds to the gold to stretch higher. On Wed Wednesday, US Procurement Directors Index (PMI) will be released for January. The PMI print can be softer enough to remove gold again to the highest new level ever.
Daily Digest Market engines: stretch up
- Investors and merchants invest their money under gold, away from technology shares, while they are safe from its lowest levels in the United States, where Bloomberg relates to inflation fears.
- At 14:45 GMT, the S& P Global will issue the final reading of the Procurement Manager Index in January. The PMI Services ISM is expected to be stable at 52.8.
- At 15:00 GMT, the ISM Supply Management Institute (ISM) will also issue PMI data for the service sector as a whole:
- The female managers are expected to reach 54.3 out of 54.1 in December.
- The paid prices were composed at 64.4 last time and had no expectations.
- The CME Fedwatch tool shows an 83.5 % chance to maintain the interest rate unchanged at the March 19 meeting, compared to 16.5 % to reduce the rate of price 25 basis.
Technical analysis: Gold is the spot of the sweet investor
Gold is torn again, and with China returning to the market after Chinese New Year holidays, you expect to see the step to catch up with assets. As the alloys gathering went to its fifth day on Wednesday, the Chinese merchants would try to catch up with it, which means that any decline or decline will be purchased with interest. Due to the lack of reference levels bearing a historical value anymore, the levels of the axis point within the day have become increasingly important.
The level of the axis point this Wednesday is the first close support at $ 2,831. From there, the S1 support should reach $ 2,818, although it does not seem the best. Instead, find S2 support at $ 2,793, which coincides with approximately $ 2,790 (the highest level on October 31, 2024) as a more important level.
On the other hand, the R2 resistance at $ 2,869 is the next level of viewing, followed by logical large numbers such as $ 2,880 and $ 2900. Moreover, some analysts and strategists have already called for $ 3,000.
Xau/USD: Daily chart
Common questions about employment
Labor market conditions are an essential element in assessing the health of the economy and thus the main driver to evaluate the currency. High labor, or low unemployment, has positive effects on consumer spending and thus economic growth, which enhances the value of the local currency. Moreover, the very narrow labor market – a situation in which there is a shortage of workers to fill open positions – can have effects on inflation levels, and therefore monetary policy leads to a decrease in employment and high demand to high wages.
The pace with salaries in the economy is the key to policy makers. High wage growth means that families have more money for spending, and usually lead to an increase in prices in consumer goods. Unlike the most volatile inflation sources such as energy prices, wages are seen as a major component in the basic and continuous inflation as it is unlikely to be removed from the increase in salaries. Central banks around the world pay close attention to wage growth data when making a decision on monetary policy.
The weight that each central bank is appointed to the conditions of the labor market depends on its goals. Some central banks explicitly have states related to the labor market, which exceeds inflation levels. The American Federal Reserve (Fed), for example, has a double mandate to enhance the maximum employment and stable prices. Meanwhile, the only mandate of the European Central Bank (ECB) is to maintain inflation under control. However, despite any mandates they have, the conditions of labor market are an important factor for policy makers given their importance as a criterion for the health of the economy and its direct relationship to inflation.
