On Wednesday (December 4th) morning trading in the Asian market, spot gold fluctuated narrowly and is currently trading around $2642.05 per ounce. Gold prices rose 0.2% on Tuesday, closing at $2643.57 per ounce. Political issues in South Korea and France provided safe haven support for gold prices, but previously strong US employment data suggested that the Federal Reserve would adopt a cautious attitude towards interest rate cuts. The rebound in US bond yields has put pressure on gold prices, and the market is waiting for further economic clues.

French lawmakers will vote on a motion of no confidence on Wednesday, which is almost certain to overthrow Prime Minister Michel Barnier's fragile coalition government and deepen the political crisis in the eurozone's second-largest economy. Unless there is a final accident, the Barnier government will become the first French government in over 60 years to be forced to step down due to a vote of no confidence.

Yin Xiyue suddenly declared martial law on Tuesday evening to crack down on the "anti national forces" among his opponents. But angry lawmakers rejected the law, which is the biggest political crisis in South Korea in decades.

However, a few hours later, South Korean President Yoon Seok yeol announced on Wednesday that he would lift the martial law that had just been announced a few hours ago, losing the confrontation with the parliament, which rejected his attempts to ban political activities and censor the media.

JPMorgan forecasts that the gold price may rise to 3000 US dollars/ounce in 2025 due to the reduction of the foam degree of physical demand and futures positions, which will lay the foundation for further growth in 2025.

The risk aversion sentiment helped gold prices rise to around $2653 during Tuesday's trading session, but failed to hold on to the gains as a strong US employment report could lead the Federal Reserve to take a cautious stance on interest rate cuts.

The number of job vacancies in the United States increased slightly in October, while the number of layoffs decreased, indicating that the labor market continues to slow down in an orderly manner. The US Department of Labor Job Openings and Labor Mobility Survey (JOLTS) shows that as of the last day of October, job vacancies measuring labor demand increased by 7.744 million. The number of layoffs decreased by 169000 to 1.633 million.

The report demonstrates the sustained resilience of the economy and does not indicate significant risks, "said Oren Klachkin, a financial markets economist at Nationwide." In the Federal Reserve's view, policy remains restrictive and may pause interest rate cuts next year after another one

Daniel Ghali, commodity strategist of Dow Ming Securities, said: "JORTS data confirmed our expectation of a rebound in the labor market, which eased people's concerns about a sharp slowdown in the labor market before the release of treasury bond in Friday's non-agricultural employment report."

Federal Reserve officials stated on Tuesday that they still believe inflation is falling towards the 2% target and expressed support for further interest rate cuts in the future, but no one strongly supports or opposes a rate cut at the next rate meeting in two weeks. Before the release of Friday's non farm payroll report, investors' focus will shift to the ADP employment report and Federal Reserve Chairman Powell's speech on Wednesday.

We must continue to readjust our policies now, whether in December or later, and we will have the opportunity to debate and discuss this issue at our next meeting, "San Francisco Fed President Daley said on Fox Business Network." I think we need to maintain an open mind

Chicago Fed President Goolsby also did not disclose his views on the possible outcomes of the upcoming meeting on December 17-18 during his speech at Crain's "Power Lunch". Gulsby said, "In the next year, I feel that interest rates will decrease significantly from their current levels, but we have meetings every six weeks because the situation will change

However, as Daly, Gulsby, and Federal Reserve Governor Kugler stated in their speeches on Tuesday, the Federal Reserve is unable to respond to policies that have not yet been issued. They are closely monitoring new data when weighing the decisions they are about to make.

There will be a large number of important reports in the next two weeks, including Friday's monthly job market report and next week's November consumer inflation data.

A Reuters survey of economists estimated that employment increased by 200000 in November, compared to only 12000 in October, the lowest increase since December 2020. The unemployment rate is expected to rise from 4.1% in October to 4.2%.

In recent years, we have made significant progress in achieving the dual goals of full employment and stable prices, so I believe the economic situation is good, "Kugler said at the Detroit Economic Club." The labor market remains stable, and inflation seems to be on a sustainable path towards our 2% target

Traders currently believe that there is a 70% chance of the Federal Reserve cutting interest rates by 25 basis points in December, slightly lower than Tuesday's 75%.

The yield of 10-year treasury bond fell to a low point in more than a month in the afternoon on Tuesday, but then rebounded. The yield on US 10-year treasury bond bonds rose 0.5 basis point to 4.23% late Tuesday. The yield of two-year treasury bond bonds, which usually follows interest rate expectations, fell 4.7 basis points to 4.151%.

On this trading day, the November ADP employment report (commonly known as the "small non farm payroll") for the United States will be released. The monthly factory order rate for October and the November ISM non manufacturing PMI data for the United States will also be released during this trading day. Investors need to pay close attention, and continue to follow the speeches of Federal Reserve officials. Pay attention to the vote of no confidence by the French Prime Minister.

French Prime Minister Michel Barnier's budget proposal has faced strong opposition from various political forces, and he will face a vote of no confidence on Wednesday. Barnier's budget includes painful tax increases and spending cuts aimed at repairing the country's precarious finances.

We are at the end of a crisis, "said Marc Chandler, Chief Market Strategist at Bannockburn Forex in New York

A vote of no confidence will be held on Wednesday. After the vote is passed, they will not be able to hold elections until July next year. Therefore, they may appoint a prime minister and try again, or make Barnier a caretaker prime minister and pass some laws to keep the government in power until July

The hedging demand reflected by the volatility of euro options has reached its highest level since March 2023 this week, coupled with a series of weak data, political uncertainty in major economies in the eurozone, and the seemingly unstoppable US dollar, the euro may be in trouble. However, high volatility is also expected to attract some safe haven buying to support gold prices.

Daily chart of spot gold

The vote of no confidence is approaching, and the collapse of the Barnier government in France is almost certain

French lawmakers will vote on a motion of no confidence on Wednesday, which is almost certain to overthrow Prime Minister Michel Barnier's fragile coalition government and deepen the political crisis in the eurozone's second-largest economy. Unless there is a final accident, the Barnier government will become the first French government in over 60 years to be forced to step down due to a vote of no confidence. The French government has been struggling to control its huge budget deficit.

Parliamentary officials said that the debate will begin at 4 pm (23:00 Beijing time) and voting is expected to take place approximately three hours later. President Macron will return to France on the same day after concluding his state visit to Saudi Arabia.

Barnier stated in a prime time television interview on Tuesday evening that he is open to budget negotiations with Marine Le Pen's far right political party, the National Union, and other parties, and hopes to pass the vote of no confidence. Banier warned that the air was filled with "many tensions... many feelings of not being treasury bond positive, many feelings of anger". We must be careful and cautious. However, he rejected the idea put forward by some members of his center right political party that Macron should resign to resolve the crisis, stating that Macron is "one of the guarantees of stability in our country.

Macron, who is currently visiting Saudi Arabia, has been asked about increasing speculation that he may not be able to complete his term. I will do my best to fulfill this trust until the very last moment, "French media quoted Macron as saying. His term ends in mid-2027, and the parliament cannot force him to step down.

Budget Minister Laurent Saint Martin said that overthrowing the government and its budget plan would mean larger deficits and more instability.

The risk premium of French treasury bond bonds to German bonds approached its highest level in more than 12 years on Tuesday.

After weeks of tense confrontation, Barnier stated that he will attempt to forcefully pass the social security portion of the budget without a vote in parliament, thus bringing the political crisis to a critical juncture. Previously, this part of the content did not receive support from the National Alliance.

The left and far right combined have enough votes to overthrow Barnier, and Le Pen has confirmed that the National Alliance will vote in support of the left-wing alliance's vote of no confidence. The motion of no confidence proposed by the National Alliance itself did not receive sufficient support from legislators

If the vote of no confidence is passed, Macron may demand that Barnier continue to serve as caretaker during the search for a new prime minister, and the new prime minister candidate is likely to be determined next year

South Korean President Yoon Suk yeol announced the lifting of martial law, but was defeated in the confrontation with the parliament

South Korean President Yoon Suk yeol announced on Wednesday that he will lift the martial law that was just announced a few hours ago. He lost in a confrontation with the parliament, which rejected his attempts to ban political activities and censor the media.

Yin Xiyue suddenly declared martial law on Tuesday evening to crack down on the "anti national forces" among his opponents. But angry lawmakers rejected the law, which is the biggest political crisis in South Korea in decades. Yonhap News Agency reported that the cabinet had agreed to lift martial law earlier on Wednesday.

The leader of a small opposition party, Cao Guo, met with protesters outside the parliament and said, "This is not over yet. He shocked everyone." Cao Guo vowed to unite the votes of other political parties to impeach Yin Xiyue.

190 members of parliament unanimously voted against martial law. Yin Xiyue's political party also urged him to lift martial law. According to South Korean law, if more than half of the members of parliament vote to lift martial law, the president must immediately lift it.

South Korea has been a democratic country since the 1980s, as well as an ally of the United States and a major economy in Asia. This crisis has shocked the international community.

Earlier, US Deputy Secretary of State Kurt Campbell stated that the US is following the events happening in South Korea with "serious concern" and hopes that the crisis can be resolved peacefully in accordance with the rule of law. After Yin Xiyue declared martial law, the military stated that parliamentary and political party activities would be banned, and media and publishers would be under the control of the martial law command.

Yin Xiyue has focused on domestic political opponents. This is the first time since 1980 that South Korea has declared martial law. Yin Xiyue is a professional prosecutor who was narrowly elected in May 2022. He has been unpopular and his approval rating has been hovering around 20% for several months.

His National Power Party suffered a disastrous defeat in the parliamentary elections in April this year, handing over control of the unicameral parliament to the opposition party that won nearly two-thirds of the seats

US job vacancies steadily increase in October, with the largest decline in layoffs in a year and a half

The number of job vacancies in the United States steadily increased in October, with the largest decline in layoffs in a year and a half, indicating that the job market continues to slow down in an orderly manner.

But the U.S. Labor Department's treasury bond bond survey on job vacancies and labor mobility (JORTS) on Tuesday also showed that employers were hesitant to recruit more employees. Layoffs are at historically low levels, stabilizing the labor market and overall economy by driving wage increases and subsequently driving consumer spending.

In October, each unemployed person corresponds to 1.11 job vacancies, higher than September's 1.08. The confidence of workers in the labor market has also increased, with the number of resignations reaching the largest increase in nearly a year and a half. The labor market conditions may determine whether the Federal Reserve will cut interest rates for the third consecutive time this month, as there is a lack of progress in reducing inflation to the target level of 2%.

The report demonstrates the sustained resilience of the economy and does not indicate significant risks, "said Oren Klachkin, a financial markets economist at Nationwide." In the Federal Reserve's view, policy remains restrictive and may pause interest rate cuts next year after another one

According to the Bureau of Statistics of the US Department of Labor, as of the last day of October, the number of job vacancies measuring labor demand increased by 372000 to 7.744 million. The September data was revised down to 7.372 million, with an initial value of 7.443 million. Economists previously estimated that there would be 7.475 million job vacancies.

But the number of vacant positions in the federal government has decreased by 26000. The job vacancy rate increased from 4.4% in September to 4.6%.

Affected by the construction, manufacturing, finance and insurance, professional and business services, and leisure and hotel industries, the number of recruits decreased by 269000 to 5.313 million. The recruitment rate decreased from 3.5% in September to 3.3%.

Due to the Federal Reserve's fight against inflation and rising borrowing costs, businesses have little willingness to increase manpower. However, the employer did not carry out large-scale layoffs. The number of layoffs decreased by 169000 to 1.633 million, the largest decline since April 2023. The number of layoffs in the construction, manufacturing, leisure, and hotel industries has decreased. But the number of layoffs in the retail industry has increased by 60000. The layoff rate decreased from 1.1% in September to 1.0%.

More and more workers are resigning, possibly in search of better jobs. The number of resignations increased by 228000 to 3.326 million, the largest increase since May 2023. The resignation rate, considered a good indicator of labor market confidence, rose from 1.9% in September to 2.1%. The increase in resignation rate indicates that salary levels may remain high.