#GoldTechnical analysis.#24K99 News On Wednesday (January 8), the price of spot Gold experienced significant fluctuations, as the “little non-farm” ADP employment data and the Federal Reserve's meeting minutes triggered market movements. Ultimately, the Gold price closed strongly up by 13 dollars.

The December 'little non-farm' report showed that private employment was weaker than expected, leading some market participants to believe that the Federal Reserve may not be as cautious regarding interest rate cuts this year, encouraging the Gold price to reach a four-week high on Wednesday.

'Little non-farm' weaker than expected.

The USA announced the ADP employment report known as 'little non-farm' on Wednesday, which showed that the number of private sector jobs increased by 0.122 million after seasonal adjustment in December last year, the lowest increase since August of last year, below economists' expectations of 0.139 million, and significantly lower than the 0.146 million in November.

After the release of the ADP employment data, the Gold price continued to rise, reaching as high as 2670.01 dollars per ounce during the New York session, setting a new intraday high.

Bart Melek, head of commodity strategy at TD Securities, stated that the decrease in the number of private sector jobs has driven up Gold prices, as a reduction in employment ultimately suggests that the economic situation is weaker than many anticipated.

The Federal Reserve minutes suggest that "slowing the pace of easing is appropriate."

FXStreet Analyst Christian Borjon Valencia pointed out that the wording of the Federal Reserve meeting minutes is neutrally hawkish, suggesting that "slowing the pace of easing is appropriate."

After the release of the Federal Reserve minutes, Gold prices retracted some gains, but ultimately closed higher.

Spot Gold closed up $13.06 on Wednesday, an increase of 0.49%, reporting at $2661.39 per ounce.

Gold is viewed as a hedge against inflation, but because it does not yield interest, a high interest rate environment reduces its investment appeal.

At 2 PM Eastern Time on Wednesday,the Federal Open Market Committee(FOMC) released the minutes from last year's monetary policy meeting held on December 17-18. The minutes showed that against a backdrop of rising inflation risks, Federal Reserve officials adopted a new easing stance and plan to slow down rate cuts in the coming months.

The minutes show that the Federal Reserve decided to lower the target range for the federal funds rate by 25 basis points, bringing the benchmark rate to a range of 4.25%-4.5%. This marks the Federal Reserve's third consecutive rate cut, with a cumulative reduction of 1 percentage point.

However, FOMC members expect that the pace of rate cuts will slow significantly in 2025, anticipating a total reduction of only 75 basis points for the year. Market futures prices indicate that the extent of policy easing in 2025 may be slightly below this expectation.

The minutes indicate that Federal Reserve officials expressed concerns during the December meeting regarding the impact of inflation and President Trump's policies, suggesting that future FOMC actions on rate cuts may take a more cautious approach due to uncertainty.

The minutes of the meeting reveal that "participants noted that the committee is at or nearing the appropriate time to slow the pace of policy easing, and many participants believe that multiple factors highlight the need for prudent handling of monetary policy decisions in the coming quarters."

The minutes mentioned inflation data, strong consumer spending, as well as downside risks to the labor market and economic outlook.

During the discussion on inflation developments, participants pointed out that although inflation has significantly slowed from its peak in 2022, it remains elevated.

Focus on non-farm payroll.

Gold traders are anxious about the critical labor data due out on Friday and Trump's inauguration on January 20, as they anticipate that Trump's return to the White House will introduce a series of policy initiatives.

Analysts expect that in December last year, the USANon-farm employmentIt will increase by 0.16 million people, while in November it rose sharply by 0.227 million people.

Valencia stated that Gold traders are closely monitoring the US non-farm employment report and the University of Michigan Consumer Confidence Index to be released on Friday. If both data points exceed expectations, then Gold may decline due to the overall strengthening of the dollar.

Melek said: "The market is more focused on the data to be released on Friday by the USA.Non-farm Employment DataThe market expects an increase of 163,000 jobs; if the actual data significantly exceeds expectations, it may have a negative impact on Gold prices."

James Knightley, the chief international economist at ING Groep, stated that good growth, high inflation concerns, and a slowdown in the job market without collapse continue to lead to market reductions in expectations for rate cuts this year. 'The risk is that if strong employment data and a 0.3% month-on-month core CPI increase appear again next week, market expectations for rate cuts may further decrease.'

How to trade gold?

Valencia pointed out that Gold prices showed a slight upward trend after reclaiming the 50-day (SMA) at $2648 per ounce.Simple Moving AverageAs bulls pushed Gold prices above $2660 per ounce, this paved the way for a challenge towards $2700 per ounce, and a breakthrough of this level would lead Gold prices to test the high of $2726 per ounce from December 12 of last year.

If Gold continues its rebound trend, the bull's target will aim for the record high of $2790 per ounce.

(Spot gold daily chart source: FXStreet)

On the other hand, Valencia added that if sellers pull Gold prices below the 100-day moving average of $2628 per ounce, then Gold prices may test $2500 per ounce, and the decline could expand to the 200-day moving average of $2498 per ounce.