After kicking off the new year at six-month highs, gold is seeing its US$1,900 target slipping away.
Analysts blame a tight US labour market, which directly impacts the level of hawkishness the Federal Reserve will embrace in 2023.
The gold market was just US$29 away from US$1,900 on Wednesday.
The precious metal traded at the highest levels since June, driven by additional safe-haven demand coming from investors pricing in a recession.
However, the momentum ran out of steam when the Federal Reserve December meeting minutes showed Fed officials aligning with Powell’s message that a restrictive policy stance would need to be maintained for “some time.”
Fed officials confirmed their commitment to bringing down inflation and warned against “unwarranted” loosening of financial conditions, adding that they were worried about any “misperception” in financial markets around their actions.
“No participants anticipated that it would be appropriate to begin reducing the federal funds rate target in 2023,” according to the minutes released Wednesday.
Gold saw more losses on Thursday, falling to a daily low of US$1 829.90.
This was largely in reaction to the private payrolls processor ADP reporting a better-than-expected increase in jobs in December.
At the time of writing, February Comex gold futures were trading at US$1 837,70, down 1,15 percent on the day.
A total of 235,000 positions were added last month, ADP said. Market consensus estimates were calling for an advance of just 150 000 after November’s data saw an increase of 127 000 — Kitco News.
