Gold trading alert: Gold bulls want to blow 2023 offensive as dollar and U.S. bond yields retreat

Spot gold is shaking slightly up, currently trading near $1817/oz. Overnight U.S. initial jobless claims data showed the labor market cooling, easing fears of a more aggressive Fed rate hike next year, with the dollar index falling 0.5% on Thursday and U.S. bond yields retreating from nearly a month-and-a-half high, giving gold prices upward momentum.

Phillip Streible, chief market strategist at Blue Line Futures, said the jobs data led to some dollar weakness and a pullback in U.S. bond yields, pushing gold to reverse its move, adding that markets were thinly traded due to the Christmas and New Year holidays. 

Friday is the last trading day of 2022, although gold prices once approached record highs in the first quarter, but with the Federal Reserve's many large rate hikes, gold prices began to fall back, as of now, gold prices 2022 close to close flat, the current annual decline of only about 0.65%, as the market is widely expected to slow the pace of the Federal Reserve to raise interest rates, most analysts tend to be bullish 2023 gold prices.

Watch for news related to the U.S. December Chicago PMI and the Asian epidemic this session, with a focus on the last trading day's close. For now, both weekly and monthly are expected to close higher, with technical signals suggesting a long bias in the market.

US Initial Jobless Claims increased last week

U.S. initial jobless claims increased last week and the total number of people collecting unemployment benefits reached the highest level since February in the previous week, but both readings remained at levels indicating that the U.S. job market remains tight, despite the Federal Reserve's push to cool labor demand as part of its efforts to lower inflation. 

The data showed indicated that initial jobless claims rose by 9,000 to a seasonally adjusted 225,000 in the week ended Dec. 24, in line with market expectations. Continuing jobless claims rose by 41,000 to 1.71 million in the week ended Dec. 17.

After hitting its lowest level since 1969 in May, continuing jobless claims, a measure of hiring, have been climbing since early October. The latest report is the first time since February that continuing claims broke below the lower end of the trend level of 1.7-1.8 million in the years before the pandemic, a level seen as a sign of a tight labor market.

And, while initial jobless claims data has been erratic in recent weeks, it has been well below the 270,000 threshold that economists believe has raised alarms in the labor market.

Thomas Simons, money market economist at Fury Financial Group, said in a report, "Given the recent increase in layoffs announced by large corporations, we would have expected to see a larger increase in claims than we typically see at this time of year, but so far this has not happened."

He said it's also possible that severance payments are causing delays in unemployment claims for laid-off workers, but "that's hard to quantify."

Fed Chairman Jerome Powell said earlier this month that "it feels like we have a structural labor shortage." 

Indeed, the resilience of the labor market is a central concern for Fed policymakers, with the U.S. adding an average of 392,000 new jobs per month this year despite rapid rate hikes and growing concerns about a recession next year. As of October, each unemployed person corresponded to about 1.7 jobs, about 0.5 higher than the ratio of job openings to the unemployed before the epidemic.

Officials believe this force provides ample room for them to continue raising interest rates to lower inflation, which by their favored measure is still nearly three times the 2% target level on an annual basis, despite recent signs that inflation is easing.