Gold prices remained volatile last Friday (December 6), with spot gold closing at $2633.02 per ounce, up about 0.05%. Earlier, the US November employment report showed that the labor market continued to gradually loosen, leaving room for the Federal Reserve to cut interest rates again. In addition, weekend data showed that the People's Bank of China increased its holdings of gold by 160000 ounces again after six months. After more than 13 years of civil war, Syrian opposition armed groups seized control of the capital Damascus on Sunday, and the South Korean martial law crisis continued to ferment. In the short term, bullish opportunities have increased.

The acceleration of employment growth in the United States in November may not necessarily mean a substantial shift in the steady loosening of the labor market, leaving room for the Federal Reserve to cut interest rates again this month.

Alex Ebkarian, Chief Operating Officer of Allegiance Gold, said, "The data is somewhere in between. We see more non farm jobs than expected, which may create some bearish sentiment towards gold in the short term, but private jobs are slightly lower than expected, almost 9000 lower, once again confirming that the Federal Reserve may cut interest rates in the coming weeks“

The US dollar and US treasury bond bond yields fell after the labor market report showed 227000 non farm jobs were added last month. Economists surveyed previously predicted an increase of 200000 job opportunities.

Chicago Fed President Goolsby said that economic conditions will determine the speed at which the Fed cuts interest rates from current levels, but he added that he hopes the Fed can determine a stopping point by the end of next year.

Currently, traders believe there is an 85% chance that the Federal Reserve will cut interest rates by 25 basis points at its December meeting, compared to 72% before the release of non farm payroll data.

On Saturday (December 7th), data showed that the People's Bank of China increased its holdings of gold by 160000 ounces after a six-month hiatus, with a total size of 72.96 million ounces; In the rapidly changing international situation, the People's Bank of China has once again made purchases of gold, highlighting the role of gold in diversifying foreign reserve strategic assets.

On the one hand, the market's attention will continue to focus on geopolitical news, but more attention may be paid to the upcoming US November CPI data this week, and investors need to pay attention to changes in market expectations.

Although the situation in Syria may promote risk aversion buying in the short term, it should be noted that the Russia-Ukraine conflict, Israel and Hamas conflict may usher in a ceasefire, which may suppress the gold price trend.

US President elect Trump stated on December 8th that Russia and Ukraine "should immediately cease fire and begin negotiations

The Palestinian Islamic Resistance Movement (Hamas) issued a statement on the night of the 8th local time, stating that a delegation led by senior official Khalil Hayah left the Egyptian capital Cairo after meeting with the Director of the Egyptian Intelligence Agency. The statement stated that both sides discussed issues such as achieving a ceasefire in the Gaza Strip and establishing a new management mechanism. The Hamas delegation emphasized its support for these efforts and its commitment to ending hostilities against the Palestinian people.

Daily chart of spot gold

Syrian President Bashar al Assad was overthrown by opposition armed groups and fled by plane, but his whereabouts are unknown

After more than 13 years of civil war, Syrian opposition armed groups seized control of the capital Damascus on Sunday, announcing the overthrow of President Bashar al Assad. Bashar was forced to flee, ending decades of rule by his family and marking a shocking moment in the Middle East.

This also dealt a heavy blow to the influence of Bashar al Assad's allies Russia and Iran in the Middle East region. Iranian English news television reported on Sunday that Syrian rebels stormed into the Iranian embassy after capturing Damascus.

A Syrian military officer stated that the Syrian Army Command notified its subordinate officers on Sunday that Bashar's rule has ended. But the military later stated that it is continuing its operations against "terrorist organizations" in important cities such as Hama and Homs, as well as in rural areas of Daraa.

Since the sudden advance of the rebels a week ago, Bashar has not made any public speeches. Two senior military officers stated that Bashar left Damascus by plane earlier on Sunday and his whereabouts are unknown. Bashar and his wife and children are still missing.

The Syrian rebel alliance stated on Sunday that it is continuing efforts to complete the transfer of Syrian power to a transitional management body with full administrative authority.

Witnesses said that thousands of people gathered in a major square in Damascus by car or on foot, waving their hands and shouting "freedom" to break free from the half century rule of the Assad family.

A Türkiye security source said that the Syrian army supported by Türkiye had controlled about 80% of the land in the Mambiji region in northern Syria and was close to winning the victory over the local Kurdish armed forces.

The Syrian civil war broke out in 2011 as an uprising against Bashar al Assad's rule. After years of stalemate, Islamic rebels affiliated with Al Qaeda suddenly launched a lightning attack, posing the greatest threat to Bashar al Assad. The speed of the rebel advance has surprised Arab authorities and raised concerns about a new round of regional unrest.

This marks a turning point in Syria, where years of war have turned cities into ruins, hundreds of thousands of people have died, and millions have been forced to flee abroad as refugees. Daniel Shapiro, Deputy Assistant Secretary of Defense for Middle East Affairs, stated on Sunday that the United States will continue to maintain its presence in eastern Syria and will take necessary measures to prevent the resurgence of ISIS

At a meeting held in Manama, Anwar Gargash, the diplomatic advisor to the UAE President, said the main concerns were "extremism and terrorism". He said Syria has not yet emerged from its predicament and added that he does not know if Bashar is in the UAE.

Syrian Prime Minister Mohammad Ghazi al Jalali has called for free elections so that Syrians can choose who they want.

Jalali also stated that he has been in contact with rebel leader Abu Mohammed al Golani to discuss transitional management issues, marking significant progress in shaping Syria's political future.

The martial law turmoil in South Korea continues to escalate, and President Yoon Suk yeol is under investigation by prosecutors

The leadership crisis in South Korea deepened on Sunday, with media reports stating that prosecutors have listed South Korean President Yoon Suk yeol as the subject of a criminal investigation for attempting to impose martial law last week, and the former Defense Minister has also been arrested. The South Korean National Assembly voted on the impeachment of President Yoon Suk yeol on Saturday, but the impeachment case was ultimately aborted due to the absence of a majority of ruling party members.

The leader of the ruling party, Han Dong hoon, and Prime Minister Han Deok soo jointly issued a statement to the people on Sunday. Han Dong hoon stated that before Yoon Seok yeol steps down, he will no longer intervene in foreign affairs and other national affairs. But opposition lawmakers condemned it as another unconstitutional seizure of power without resignation or impeachment.

Thousands of South Korean citizens gathered in front of the National Assembly on Sunday, demanding the impeachment and arrest of Yoon Seok yeol and the dissolution of the ruling party. Speaker of the National Assembly Yu Yuanzhi stated that it is unconstitutional to delegate presidential power to the Prime Minister and the ruling party without impeachment. Yu Yuanzhi proposed to convene a party meeting to discuss how to immediately suspend the presidential power of Yin Xiyue.

The main opposition party, the United Democratic Party, demands the immediate suspension of Yoon Suk yeol's presidency and the deprivation of his control over the military. The Democratic Party also demands the arrest of Yoon Seok yeol and military officials involved in the martial law scandal.

According to a report by Yonhap News Agency, the prosecutor has launched an investigation into Yoon Seok yeol as a suspect on suspicion of civil unrest. At present, it is not possible to immediately contact the prosecutor to comment on this report.

South Korean prosecutors arrested former Defense Minister Kim Jong hyun on Sunday and seized his mobile phone. According to Yonhap News Agency, Kim Jong hyun voluntarily went to the Seoul Central District Prosecutors Office for investigation around 1:30 am on Sunday.

Yonhap News Agency reported that the national police raided Kim Jong hyun's office on Sunday as part of an investigation into allegations of treason against Yoon Seok yeol and senior ministers.

South Korean Prime Minister Han Deok soo said on Sunday that the cabinet will make every effort to "maintain trust with allies," referring to the United States and Japan. In order to appease the public, several military leaders, including the acting Minister of Defense, have stated that they will refuse to accept any order to implement a new round of martial law.

The Ministry of National Defense did not respond to repeated questions from foreign media on Sunday regarding who is currently the commander-in-chief of the South Korean military

The People's Bank of China increases its holdings of gold again after six months

Data released on Saturday (December 7th) showed that China's foreign exchange reserves rose by 4.81 billion to 3265.86 billion US dollars month on month at the end of November, reversing the significant decrease from the previous month, while capital inflows offset the negative valuation effect caused by the rebound of the US dollar; The central bank has once again increased its holdings of gold reserves after six months, but the adjustment in gold prices has led to a slight decline in the amount of gold reserves denominated in US dollars.

Since the beginning of this year, China's foreign exchange reserves have increased by a total of 27.88 billion US dollars. In 2023, foreign reserves increased by 110.3 billion US dollars, and in 2022, foreign reserves decreased by 122.5 billion US dollars. The November foreign exchange reserves denominated in SDR were 2485.6 billion SDR, an increase of 36.7 billion SDR from the previous month, an increase of 3.9 billion SDR from the previous month, and a cumulative increase of 72.2 billion SDR this year.

The People's Bank of China increased its holdings of gold by 160000 ounces again after six months, with a total size of 72.96 million ounces; In the rapidly changing international situation, the People's Bank of China has once again made purchases of gold, highlighting the role of gold in diversifying foreign reserve strategic assets.

The People's Bank of China started purchasing gold from November 2022 until April 2024, with a cumulative purchase of 10.16 million ounces of gold over 18 months. It then suspended gold purchases for six consecutive months and repurchased 160000 ounces of gold in November. However, the gold reserves in US dollars are only 193.43 billion US dollars, which still accounts for less than 6% of the total reserve size.

The latest data of the World Gold Council (WGC) also shows that the net gold purchase volume of central banks in October was 60 tons, the highest in 2024. Among them, the central banks of India, Türkiye and Poland are the main forces for gold purchase.

Federal Reserve's Gulsby says hopes to approach neutral interest rate target by the end of next year

Chicago Fed President Goolsby said that economic conditions will determine the speed at which the Fed cuts interest rates from current levels, but he added that he hopes the Fed can determine a stopping point by the end of next year.

Gulsby said in his comments to reporters, "I hope conditions continue to develop so that we can approach the range where monetary policy has a neutral impact on the economy

Although he is unwilling to specify his estimate of the neutral interest rate, he said that the level of around 3% is far below the current range of 4.5% to 4.75%, which is roughly the median stop point predicted by Federal Reserve officials at the September meeting, and "in my opinion, it is not crazy".

The inflation rate has almost reached the level we want; the unemployment rate is also close to what we consider stable levels, "he said, as the economy continues to grow." The only exception is that our current interest rates are much higher than what most Fed officials expect to reach, so if the economy continues to develop as expected, "interest rates will be much lower than they are now

The Federal Reserve is expected to cut interest rates by another 25 basis points at its upcoming meeting on December 17-18, while also updating policymakers' forecasts for next year's economic and interest rate policies.

In 2025, Gursby will have voting rights on interest rate policy in the Federal Open Market Committee (FOMC). He expressed his views in an interview with reporters at the Chicago Fed, stating that he believes the economy is at or near full employment and expects progress towards achieving the Fed's 2% inflation target.

He said that in this situation, the Federal Reserve can continue to gradually lower interest rates so that officials can observe the development of the economy and determine a stopping point.

He said that currently, an unexpected surge in inflation or an unexpected tightening of the job market is needed to push the Federal Reserve in different directions.

Gulsby said, "To break away from the path I envision for next year, changes must be made in either or both of these areas... The inflation rate doesn't seem to reach 2%, and the job market looks overheated

A new report shows that the United States added 227000 non farm jobs in November, which has once again confirmed by many analysts that the economy has largely returned to normal from the excessive prosperity during the pandemic. The unemployment rate is considered by Federal Reserve officials to be at or near full employment, and the monthly average employment coverage rate is hovering at the level of the decade before the pandemic.

Gulsby said that the job market is "in a better balanced and more stable state," and he expects the Federal Reserve to hold "a series of very difficult to decide meetings" in the coming months to discuss the magnitude and speed of further lowering benchmark policy rates.

The significant increase in job opportunities in the United States and the rise in unemployment rate provide evidence for the Federal Reserve's interest rate cut this month

In November, there was a significant increase in job opportunities in the United States, which was severely affected by hurricanes and strikes. However, the unemployment rate rose to 4.2%, indicating that the labor market conditions are easing, which should provide evidence for the Federal Reserve to cut interest rates again this month.

The resilience of the labor market is driving economic growth through strong consumer spending, and the employment report released by the Ministry of Labor on Friday showed steady wage growth in November. The economy created 56000 more job opportunities in September and October than previously estimated.

This report should reassure both those who are bullish and bearish on the economy, "said Scott Anderson, Chief US Economist at BMO Capital Markets. Steady non farm employment growth and strong profit growth should keep the economic expansion on a solid foundation, even if the gradual increase in unemployment rate will ease demand and inflationary pressures for a period of time. "

The Bureau of Labor Statistics of the US Department of Labor stated that non farm payroll jobs increased by 227000 in November, while the October data was revised up by 36000, from the previous value of 12000. Economists surveyed by Reuters previously predicted an increase of 200000 job opportunities in November.

In the past three months, the average monthly growth of employment positions has been 173000. Economists previously predicted that the end of strikes at Boeing BA. N and another smaller aerospace company, as well as the reversal of disruptions caused by hurricanes Helen and Milton, would result in at least 90000 job opportunities.

According to the macro estimation of Kaitou, the cumulative contribution of these two factors is about 70000 positions, so the potential job growth is 157000.

Stephen Brown, Deputy Chief Economist for North America at Capital Economics, said, "This still means that potential job growth is slightly stronger than in October

This is consistent with the information conveyed by some alternative indicators, which indicate that the labor market situation is stabilizing at a healthy level

According to the FedWatch tool of Zhishang Institute, the probability of the Federal Reserve cutting interest rates by 25 basis points at its policy meeting on December 17-18 rose to 89% in financial markets, but has now slightly fallen to around 85%.

The unemployment rate has slightly increased to 4.2%, after remaining at 4.1% for two consecutive months, reflecting weak household employment. The small-scale and volatile household survey used to compile the unemployment rate showed a decrease of 355000 in employment. The number of employed households also decreased in October.

About 193000 people left the workforce in November, resulting in a decrease in labor force participation rate from 62.6% in October to 62.5%. The labor force participation rate refers to the ratio of the population with jobs or looking for jobs to the working age population.

The employment population ratio, which is considered a measure of the economy's ability to create employment, decreased from 60.0% in October to 59.8%. The number of permanent unemployed increased from 1.835 million in October to 1.893 million.

The median duration of unemployment increased from 10 weeks in October to 10.5 weeks, the highest in nearly three years. This is consistent with the increase in the number of people applying for unemployment benefits.

The average hourly wage in November increased by 0.4% month on month, which is the same as the increase in October; The year-on-year growth rate was 4.0%, which is the same as the growth rate in October.

The average weekly working hours increased from 34.2 hours in October to 34.3 hours. After a 0.2% increase in October, total salary income increased by 0.8% in November, which will continue to stimulate consumption.

The 10-year yield in the United States fell to a six week low after the release of non farm payroll data, and the market is betting on a December interest rate cut

The yield of US treasury bond bonds fell to a six week low because after the release of US employment data in November, investors believed that the data gave the green light for the Federal Reserve to cut interest rates again at its meeting on December 17-18.

The yield on the 10-year treasury bond bond fell 3.3 basis points to 4.149%. The yield at the front end of the curve experienced a greater decline, with the two-year yield dropping by 5 basis points to 4.096%.

The yield of 10-year treasury bond fell to 4.126% in the session, the lowest since October 21; The yield of two-year treasury bond fell to 4.077%, the lowest since November 1.

Anne Wealth Management Chief Economist Brian Jacobsen said, "There seems to be no reason to worry about an imminent economic recession, and the Federal Reserve has no reason to pause interest rate cuts

The non farm payroll data is like a Thanksgiving buffet, with job growth meeting expectations and data being revised upwards, but the unemployment rate is rising despite a decrease in participation rates, "said Lindsay Rosner, head of multi industry investments at Goldman Sachs Asset Management." This data has not stifled the festive atmosphere, and the Federal Reserve will still implement interest rate cuts in December

Ellen Zentner, Chief Economic Strategist at Morgan Stanley Wealth Management, said that although the economy is still generating healthy employment and income growth, "further increases in unemployment have taken away some of the bright spots in the labor market, providing the necessary conditions for the Federal Reserve to cut interest rates in December.

Last week, the 10-year yield decreased by 4.4 basis points, and the two-year yield decreased by 7.6 basis points.

Focus on US inflation data this week

Although market expectations for the Federal Reserve to cut interest rates at its upcoming meeting continue to rise, Federal Reserve Governor Bauman said that the inflation risk facing the economy still exists, and labor market data is difficult to interpret, so further interest rate cuts need to be approached with caution.

Bauman's speech provided support for the US dollar index. After last Friday's non farm payroll data, the US dollar index fell to 105.41, a new low since November 12. However, it reversed its downward trend and closed at 105.97, an increase of about 0.24%.

I still believe that our task in stabilizing prices faces greater risks, especially as the labor market continues to approach full employment, "Bauman said at the executive management meeting of the Missouri Bankers Association. In light of this," I tend to cautiously and gradually lower policy rates while inflation remains high

Bauman refused to disclose what actions she believes the Federal Reserve should take at the upcoming meeting. She said that the employment report on December 6th and the inflation data for next December 11th will "help support my decision-making or support my way of thinking about the FOMC decision in a week and a half.

Mark McCormick, Head of Foreign Exchange and Emerging Markets Strategy at TD Securities, wrote in a research report: "The (non farm payroll) report has a lot of noise, but it is weak enough to strengthen the position adjustment of the entire foreign exchange market

He pointed out that the US dollar fell with the yield of US treasury bond bonds earlier last Friday, "reflecting that the market believes that now is enough to expect the Federal Reserve to cut interest rates again this month".

He wrote, "The Consumer Price Index (CPI) for December is likely to be the last useful data for the Federal Reserve's December meeting, but we believe that the resistance to the weakening of the US dollar is still minimal, providing an excellent opportunity to buy at a low price in early 2025

James Knightley, Chief International Economist of ING in the United States, wrote in a research report: "The Federal Reserve will indeed cut interest rates by 25 basis points to continue moving policy from restrictive areas towards neutrality. However, they will send a signal to slow down the pace of interest rate cuts and may pause action at the Federal Open Market Committee (FOMC) meeting in January

He pointed out that the risk of this viewpoint lies in the core Consumer Price Index (CPI) on December 11th. He said that the current consensus expectation is a 0.3% increase, but as long as it approaches 0.25% instead of 0.349%, he believes that the Federal Reserve will indeed choose to cut interest rates on December 18th.