Opportunity or risk?

December promises many challenges for the gold market due to strong fluctuations from inflation, the US labor market and new policies of President-elect Donald Trump.

December is full of challenges for the gold market

The gold market has been experiencing a period of strong volatility in recent weeks, and this trend is unlikely to end soon. December promises to be a challenging month for investors.

Although gold prices still hold the important support level of $2,600/ounce, the market is very vulnerable at the moment. Investors are waiting for new information to make decisions. The current situation is like "looking for a needle in a haystack" - unpredictable, as Federal Reserve Chairman Jerome Powell said at the Jackson Hole conference in 2023.

The December gold market will be challenging for investors. Photo Kitco News

The US economy is currently in a "just right" state: not too hot and not too cold. This makes gold, which is considered a safe haven and inflation hedge, difficult to navigate.

Meanwhile, inflation remains high. The core personal consumption expenditures (PCE) index, the Fed’s preferred inflation measure, rose 2.8% over the past 12 months, well above its 2% target. That’s not high enough to force the Fed to cut interest rates (a positive for gold), but it’s also not clear enough to make a precise prediction.

On the other hand, the US labor market situation will be key. If the non -farm payrolls data released next week is positive, the market may expect a shorter monetary easing cycle. On the other hand, if the data disappoints, gold prices may rise sharply. This unpredictability is the cause of strong market volatility.

In addition to the US economy and interest rates, geopolitical factors are also causing uncertainty. President-elect Donald Trump’s social media statements could easily spark a new trade war, push up inflation and slow economic growth.

While unpredictable, this volatility presents a buying opportunity for investors who missed out on the previous rally. For those who have invested in gold and benefited from this year’s rally, stay calm and watch the market unfold, says Kitco’s Neils Christensen.

Will gold go up or down in the short term?

This week, 14 analysts participated in the Kitco News Gold Survey, which found that 6 experts (43%) predicted gold prices to rise next week, while 7 analysts (50%) predicted gold prices to continue to move sideways. Only 1 expert (7%) predicted gold prices to fall.

Meanwhile, Kitco’s online poll, which attracted 199 votes, showed that people’s sentiment has also become more cautious after witnessing the gold price movement this week. 96 retail investors (48%) expect gold prices to rise next week, 61 people (31%) predict gold will fall. The remaining 42 investors (21%) believe that gold will move sideways in the short term.

Jobs data will dominate the economic calendar next week, with the job vacancy report (JOLTS) on Tuesday, the ADP employment report on Wednesday, weekly jobless claims on Thursday and the non-farm payrolls report on Friday.

Markets will also be paying attention to the ISM manufacturing and services PMIs, released on Monday and Wednesday respectively, along with the University of Michigan's preliminary consumer sentiment index on Friday.

Wednesday is also one of the last chances to hear Federal Reserve Chairman Jerome Powell speak before the "silence" period, when he participates in a panel discussion at the New York Times DealBook Summit.

Mark Leibovit, publisher of VR Metals/Resource Letter, said he is taking a break from gold for now. " The rally ended last Friday and I was wrong to expect further gains. Now I'm waiting for a new signal to get back in, " he said.

Meanwhile, Adam Button, chief currency strategist at Forexlive.com, is trying to analyze the signals from Mr. Trump and their impact on the USD and gold prices. He said: "Donald Trump wants four things: 3% GDP growth, a reduction in the budget deficit to around 3% from 7%, a significant reduction in the trade deficit and a rising stock market. Those are Donald Trump's four economic priorities. He cannot achieve those things with tariffs ."

Adam Button points out that the way to achieve the above four priorities is to weaken the US dollar, which is good for gold. In the short term, Button said he is confident in the seasonal trend of gold. He said: " Gold's seasonal strength in December and January was the best of any market. Gold's growth performance during that time was phenomenal. Next month is also very good for risk trades and I think that could contribute to a weaker US dollar and a stronger gold ."

Regarding the non-farm payrolls report, Button said: “ The November jobs number is going to be difficult for the Fed to digest, because there was a drop-off from the hurricanes and there was pre-election hiring and spending. I wouldn’t discount the non-farm payrolls report .”

Analysts at CPM Group recommend buying gold at current levels, predicting it will hit $2,700 by December 11. CPM Group attributed the decline in gold prices earlier this week to easing tensions in the Middle East and expectations that Trump's nominee for Treasury Secretary Scott Bessent will adopt a more dovish tariff policy. While Bessent's appointment has eased concerns about inflation and a tariff-induced recession, those risks remain.

Sharing the same view, veteran Kitco analyst Jim Wyckoff also believes that gold will maintain its upward momentum and continue to increase in price next week due to increased safe-haven demand.

Source: https://congthuong.vn/chuyen-gia-du-doan-thi-truong-vang-thang-12-co-hoi-hay-rui-ro-361755.html