Gold rallied in Asia and has held its gains since in quiet holiday trading. It’s up $53 to $4147 and looking to climb for the first week in five.
The gain today came in a burst in Asia and topped out at $4194 before chopping sideways.
Gold has struggled since topping at $5418 just before the outset of the Iran war. The event caused reserve drawdowns and a sovereign buyer’s strike as the spike in oil prices caused currency volatility. Even as the war has ended, that’s been slow to unwind, in part because of the on-again/off-again fighting and the lack of a true peace deal.
Lately though, there have been signs of buying near $4000 in what could be sovereigns re-loading, or at least dipping their toes in.
The other problem for gold has been the strength of the US dollar. A series of stronger jobs reports and other indicators show that the AI capex boom is keeping the US economy uniquely strong. That’s been compounded by financial flows into US markets and the pricing out of Fed rate cuts.
Yesterday though, the non-farm payrolls number was weaker than expected and we saw broad USD weakness and a significant jump in gold. Today is a US holiday so we’re not getting any economic data but the numbers rolling in over the summer will be drivers of gold prices action. In addition, the earnings from megacap tech will be clues about whether AI capex spending will continue into 2027.
Technically, gold looks like it’s trying to form a base at $4000 but it will at least need to retake $4400 to generate any real positive momentum to the upside. A test of that level in July was quickly rejected and that highlights a skittish market.
This article was written by Adam Button at investinglive.com.
