TREX Global:Dollar and U.S. bond yields retreat, most analysts bullish on gold prices in 2023

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U.S. jobless claims rise last week

The number of Americans filing new claims for jobless benefits rose last week and the previous week's total number of people claiming unemployment benefits reached the highest level since February, but both readings held at levels that suggest the U.S. labor market remains tight despite the Fed's push to Labor demand is cooling as part of its efforts to reduce inflation.

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Data showed that initial claims for unemployment benefits rose by 9,000 to a seasonally adjusted 225,000 in the week ended December 24, in line with market expectations. Continuing claims rose by 41,000 to 1.71 million in the week ended Dec. 17.

Continuing claims, a measure of hiring, have been climbing since early October after hitting their lowest level since 1969 in May. The latest report was the first time since February that continuing claims had breached the lower end of the pre-pandemic pre-pandemic trend of 1.7 million to 1.8 million, a level seen as a sign of a tight labor market.

The dollar fell 0.5% on Thursday, and the monthly line is expected to usher in three consecutive negatives

The U.S. dollar index closed down 0.52% to 103.98 on Thursday as the market accepted the U.S. jobless claims data. So far, the U.S. dollar index has fallen 1.98% in December and is expected to record its third consecutive monthly decline. The short-term bearish signal of the US dollar index has increased, which is expected to provide further opportunities for gold prices to rise.

The yield on the 10-year Treasury note fell 4.7 basis points to 3.839% on Thursday.

The 10-year Treasury yield has climbed steadily in the past two weeks, after hitting a near three-month low on Dec. 7, when hopes grew that the Federal Reserve would signal an end to its rate-hike cycle.

Last week, the 10-year yield posted its biggest weekly gain in eight-and-a-half months following policy announcements from the Federal Reserve, the Bank of England and the European Central Bank.

Adding pressure to markets has been the Asian powerhouse's reversal of its COVID-19 zero policy in recent days, with some analysts seeing increased inflationary pressures in the near term due to higher consumer demand.

The 30-year yield fell 5.2 basis points to 3.925% on Thursday.

The Fed has forecast that the federal funds rate is expected to climb above 5% next year, while Chairman Jerome Powell and other officials have stressed that it may be necessary to keep rates higher for longer to stamp out high inflation.

However, analysts cautioned that it was difficult to draw conclusions on the direction of the market this week given limited trading activity around the holidays.

Institutions are bullish on the gold market outlook

According to research firm BCA, the gold market ended 2022 strongly, and its fourth-quarter momentum should continue into 2023.

In their 2023 outlook, BCA analysts said they expect gold prices to break through $1,900 in 2023. The company began building a bullish position in November, which resulted in a bullish outlook.

The research firm is bullish on gold, predicting that the Federal Reserve's monetary policy will peak, inflation will continue to be high, and global economic uncertainty will support gold prices in the new year.

"The evolution of gold prices next year will depend on the Fed's monetary policy and its impact on the dollar," analysts said in a note. Safe haven demand will rise."

As investment demand for gold continues to rise, the BCA sees central bank purchases of gold driving an increase in physical demand.

TREX Global’s view:The continued rise in the number of continuing jobless claims has increased market concerns about the U.S. labor market and strengthened expectations that the Fed will slow down rate hikes, which has put pressure on the U.S. dollar and U.S. bond yields. The situation is still tense, the technical aspect of gold is still bullish, and the gold price will fluctuate upward in the market outlook.

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