World gold prices rose last night thanks to news that the People's Bank of China was buying more gold. According to reports, the People's Bank of China increased its gold reserves in December, buying an additional 300,000 ounces, bringing its total reserves to 73.3 million ounces. This shows that China has resumed buying gold after a 6-month pause last year.
A weaker US dollar this week has also been a positive factor for the precious metals market. Gold speculators have maintained their bullish momentum despite rising US Treasury yields today. Gold futures for February delivery rose $21.30 to $2,668.70 an ounce.
Asian and European stock indexes were mixed but positive overnight, with US indexes also expected to open higher when the New York session begins.
In other developments, eurozone inflation in December continued to exceed the European Central Bank's target, rising 2.4% year-on-year, up from 2.2% in November.
The US government has blacklisted Tencent Holdings and Tesla battery supplier CATL over alleged ties to the Chinese military, escalating tensions between the world's two largest economies.
The fixed-income market is sending a warning signal to stock investors: Stocks have been overvalued relative to corporate credit and Treasurys for about two decades, according to Bloomberg. The index, which measures the ratio of profits companies can generate to their stock prices (earnings yield), compares it to the return investors can earn on bonds.
The most important U.S. economic data this week is the December jobs report, due Friday. The report is expected to show that the number of jobs increased by 160,000, down from the 227,000 increase in November.
In markets, the dollar index is slightly lower after hitting a more than two-year high last week. Nymex crude oil futures rose to trade around $74 a barrel. The yield on the 10-year US Treasury note rose to 4.642%, its highest since 2023.
Technically, February gold futures speculators have the near-term technical advantage. The next target for bulls is a close above $2,700. The downside target for bears is pushing prices below strong technical support at the November low of $2,565/oz.
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