Gold price approaches $2,700 mark after three consecutive increases

Gold futures have shown impressive strength for three straight trading sessions, rising from a low of $2,624.60 on Monday to nearly $2,700 an ounce.

As of 4:00 PM ET, the February contract closed at $2,691.70, up $11.60, or 0.43%, a level not seen since December 13, 2023. Notably, the gains came despite a strengthening US dollar, with the US dollar index up 0.15% to 109.308.

Market analysts attribute the precious metal's resilience to a number of factors.

“Safe-haven demand is modestly supporting gold, offsetting the downward pressure from a stronger dollar and higher interest rates,” said UBS analyst Giovanni Staunovo.

Adding to the market’s moves was news surrounding the inauguration of President-elect Donald Trump. Sources close to the incoming administration said Trump is considering declaring a national economic emergency to justify imposing broad tariffs on both allies and rivals.

According to Reuters, these tariffs could cause a trade war and inflation when Mr. Trump takes office on January 20 - scenarios in which gold, which is considered a hedge against inflation, usually performs well.

This political backdrop intersects with recent jobs data, which has shown signs of a slowing labor market. The ADP private payrolls report released yesterday showed 122,000 new jobs in December, down from 146,000 in November and below expectations of 136,000. This soft reading could signal a key nonfarm payrolls report due soon. Analysts polled by Reuters had expected 160,000 new jobs in December — down sharply from 227,000 in November.

Market attention is now focused on the US non-farm payrolls report released today, January 10 (local time), combined with data from ADP, which could influence the upcoming monetary policy decision of the US Federal Reserve on January 29.

The US Federal Reserve is expected to maintain its current benchmark interest rate in the range of 4.25% - 4.50%. The CME FedWatch tool now shows a 93.1% probability that the rate will remain at that level, down slightly from 94.7% yesterday and 88.2% a week ago.

Looking further ahead, the tool shows the probability of no change in rates until the March FOMC meeting is 57.7%, up from 49.4% last week.