Graphic gold prices intervals of 5 minutes
On Tuesday evening, gold prices confidently broke above $2,000 an ounce. In 20 minutes, the precious metal quotes rose from $1,990 to $2,020 (the highest value since March 2022), and the reason for their rise was the publication of statistics on the US labor market.
The number of open jobs in the labor market (JOLTS) fell in February to 9.93 million (the lowest figure since May 2021) from 10.56 million in January and was well below the consensus of 10.4 million. Fed officials, including Jerome Powell, have repeatedly said that curbing inflation requires cooling the labor market, and today’s numbers just point to it.
In addition, additional support for gold was provided by the weakening dollar against G10 currencies.
The news triggered a decline in US Treasury bond yields, which indicates an increase in investor confidence that the Fed will soon soften its position. This, and still very high inflation, are clear positives for gold, which is traditionally considered one of the main instruments of capital preservation. Silver and platinum showed even stronger percentage dynamics.
“It is worth noting a very unusual factor that usually hinders the growth of an asset, but did not show itself today,” says Oleg Syrovatkin, Leading Analyst of the Global Research Department “Opening Investments”. “According to the CFTC, in the week ending March 28 (latest available data — approx. ProFinance.ru), the volume of the net long speculative position in gold futures and options reached an 11-month high, while the volume of short positions fell to a 3-year minimum. Such positioning is clearly not the best ingredients for a short squeeze, but today they did not interfere with the growth of gold.”
Dynamics of a net long speculative position in futures and options for gold (white histogram, left scale) and the price of gold (yellow, right scale) at 1-week intervals
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On this topic:
Gold has its best month since July 2020
Banking crisis causes capital to flow from oil to gold
Gold breaks $2,000 an ounce barrier
Gold shows the best week since mid-November
Gold falls on new banking news, but JP Morgan expects rise above $2,000
