Gold’s dazzling rally hit a four-week high Friday, with prices closing 0.73% higher, approaching ~$2.7K as a surprisingly robust jobs report rattled market expectations. The precious metal is heading for its best weekly performance in seven weeks, driven by Trump’s incoming policies, persistent economic uncertainty, and central bank buying patterns.
- The US labor market report spiked inflation concerns, revealing that December payrolls surged by 256K versus FactSet’s estimated 153K — creating fresh momentum for inflation hedges as higher-than-expected spending power enters the economy.
- Otherwise, China’s central bank announced the suspension of government bond purchases amid economic woes — amplifying gold’s appeal as a safe-haven asset.
The golden path: CBC News says that gold’s 2025 return hinges on three distinct scenarios. The bull case sees global conflicts and potential Fed rate cuts driving prices higher. A Goldilocks scenario requires stable dollar conditions and smooth supply chains to maintain current levels. Conversely, the bear case suggests that a stronger dollar and higher real interest rates could trigger technical selling, potentially pushing prices lower. Amid this uncertainty, expert Kevin Shahnazari suggests maintaining a 5% to 10% allocation in gold, particularly during periods of rising prices.
