At the end of October this year, the international gold price once broke through $2,800/ounce, setting a new historical record. Entering November, the gold price trend began to fluctuate downward, hovering around $2,500/ounce at its lowest. Starting from the end of November, the international gold price began to rise. On December 11, the international gold price returned to above the $2,700/ounce mark, hitting a two-week high. As of the close, the February 2025 gold futures price on the New York Mercantile Exchange closed at $2,718.4/ounce, up 1.21%.
Recently, after a series of US employment data were released, showing that the US labor market slowed down, the Fed’s expectations for rate cuts have repeatedly heated up, which is conducive to higher gold prices. In early December, data released by the US Bureau of Labor Statistics showed that as of the week of November 30, the number of first-time unemployment claims in the United States increased by 9,000 to 224,000 from the previous month, rising to a one-month high. After the latest initial jobless claims data showed that the US job market may be weak, the Chicago Mercantile Exchange’s “Fed Watch Tool” showed that the market expected the Fed to cut interest rates this month again after a month, exceeding 80%. Subsequently, data released by the US Bureau of Labor Statistics showed that the US unemployment rate rebounded to 4.2% in November, which once again supported the Fed’s expectations of a rate cut in December. Since then, the “Fed Watch Tool” has shown that the market expects the Fed to cut interest rates in December. The possibility has remained above 90%.
In addition, the previous continuous rise in gold prices has indeed put some pressure on gold jewelry consumption, but as the year-end and new year shopping season approaches, the market expects that consumer demand for gold jewelry and physical gold will increase. The World Gold Council previously stated that the previous rise in gold prices did suppress the performance of most consumer markets, but as consumers gradually adapt to the high gold price environment, demand for gold jewelry will gradually pick up.
The central bank’s purchase of gold has also become one of the important driving forces for the rise in gold prices. Last weekend, data released by the People’s Bank of China showed that it increased its gold holdings again after a lapse of half a year. On December 11, Goldman Sachs also said in a report that three factors will support the continued rise in gold prices, namely the Federal Reserve’s loose monetary policy expectations, global central bank purchases and consumer purchases. Looking ahead, Goldman Sachs believes that central banks’ demand for gold will not slow down, and consumers will re-enter the market. Goldman Sachs predicts that by the end of next year, the international gold price may reach $3,000 per ounce.