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Gold climbs to record high as investors await jobs report

Gold prices (GC=F) soared to a record high this week while investors wait to see this Friday's jobs report data and conjecture how the Fed will move according to the results. Yahoo Finance's Ines Ferré connects the commodity's price movements with the US dollar.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

BRAD SMITH: Gold prices hit a record high this week, but are we treading water this morning here? This comes as investors await more economic data that could influence the Fed's rate decision later this month. For more on all of this, we've got Yahoo Finance's reporter, Ines Ferre, here with us. Hey, Ines.

INES FERRE: Yeah, Brad. And this Friday, that jobs report is really going to be important because it will determine if we are seeing the labor market that's continuing to cool, if the Fed's job is done. And part of the reason why we have seen gold prices surging lately, is because of the market expectation that the Fed is done tightening. And perhaps, there could be even rate cuts next year. And so, that's why you're seeing the markets when it comes to gold, going higher. I'm going to put up a 10 day chart here, so that you can see right up here.

Remember, there's gold futures and there's spot prices. And we just saw the spot prices yesterday that reached an all time high. We saw gold futures also that reached N0 highs as well, above $2100 per ounce. But then we have seen it come back down a bit. So there is resistance around the 2000 level and this is-- excuse me, this is the floor among of the 2000 level. It was resistance.

And now, we are seeing that gold is at $2,034 per ounce. Now, we are seeing this move go higher with gold because also, we have seen the 10 year Treasury, which I'm going to pull up here, that has gone lower. So there is this relationship where if the 10 year Treasury is going lower, then investors-- then bonds aren't as attractive to investors. So therefore, they go into gold. And that is the correlation that we've been seeing. We also have been watching the US dollar Index. So we're watching gold dip a little bit today. The US dollar index is going higher. Gold is denominated in US dollars.

So there is that inverse correlation between the dollar index and gold. Now, we have spoken to analysts-- two schools of thought here, that some analysts are saying, watch out, don't chase this rally when it comes to gold. And others are saying that you are seeing the beginning of a bull market for gold. That gold is going to go much higher. We've even seen calls of $3,000 per ounce in the next 12 months. And that's just simply because gold hasn't done much for a while, even though we have seen highs. Back in 2020, we saw highs. And now, we're seeing highs now. But the saying goes is, the bigger the base, the higher in space. And certainly, there are bulls out there that are calling for goal to go higher, guys.

SEANA SMITH: Certainly are, after this run to the upside. All right. Ines, Thanks.

INES FERRE: Thank you.