Gold Recovers Strength Amid Weaker US Labor Data

The precious metals market shows a clear rally in response to mixed US employment indicators. On Friday, (January 9), spot gold prices rose to around $4,490, rebounding from $4,400 the previous day. The upward momentum is driven by a combination of weaker labor market results and ongoing geopolitical tensions, which draw investors toward safe-haven assets.

## US Employment Data Disappoints

The statistics released on Friday by the Bureau of Labor Statistics (BLS) revealed that the US economy added only 50,000 new jobs in December — well below market forecasts of 60,000. This figure also did not match the revised November total of 56,000. The only positive signal was a decrease in the unemployment rate from 4.6% to 4.4%, which was better than the market consensus of 4.5%.

These diverging signals from the labor market have become a key topic of discussion for the Fed. While weaker employment data suggested the possibility of intervention, the low unemployment rate reinforced expectations that the central bank will keep interest rates unchanged at the January 27-28 meeting. Market forecasts also include two rate cuts later in the year, creating a favorable outlook for gold — a metal that benefits from low interest rates through reduced opportunity costs.

## Geopolitical Tensions Support Safe Assets

Concerns over international stability are intensifying. New US sanctions on Venezuelan oil exports and military actions in Caracas raise market anxiety. Additionally, controversial statements by former President Donald Trump regarding potential annexation of Greenland and rising tensions between Japan and China amplify risk aversion. On Friday, Trump announced on TruthSocial that negotiations in the oil and gas sector could lead to investments worth about $100 billion, and he also disclosed a meeting with top oil company CEOs at the White House.

Meanwhile, the US Supreme Court is preparing to hear a case on the legality of tariffs imposed by the Trump administration. A lower court previously ruled that the government exceeded its authority — a decision that unsettles markets and supports demand for safe-haven instruments like gold.

## Technical Outlook Points to $4,500

From a technical analysis perspective, spot gold is in a consolidation phase after recent gains. The overall trend remains bullish, with prices staying well above the 21-day simple moving average at around $4,387.

Key technical levels to watch:
- **Support**: the $4,400–4,380 zone acts as the first line of defense. Breaking below could open a test of the 50-day simple moving average near $4,231.
- **Resistance**: the $4,500 level is the immediate target, and a sustained break above could signal a move toward previous highs around $4,549.

The RSI indicator at about 64 above the midline suggests ongoing upward pressure, but the average directional index (ADX) at 22 indicates a moderate trend with less momentum than before, implying a potential slowdown in the rally.

## What to Expect?

The coming weeks will bring key catalysts — the preliminary University of Michigan consumer confidence index for January will provide fresh signals on inflation expectations. Simultaneously, Fed officials from Richmond and Minneapolis may offer guidance on the monetary policy path. The market is also watching the decision regarding the Fed chair successor, which could be announced within two weeks.

Thursday’s data showed that new unemployment benefit claims totaled 208,000, slightly below the forecast of 210,000, while layoffs in December fell to 35,553 — the lowest since July 2024. The US trade deficit narrowed sharply to $29.4 billion in October, the best result since June 2009.