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(Kitco News) The gold market kept its daily gains on weaker data, finishing Tuesday's session up nearly 2% on the day — well above the $2,000 an ounce level.
Recent macro data, which pointed to a cooling economy, and a warning from JPMorgan CEO Jamie Dimon on the banking crisis triggered another rally in gold, pushing prices to 12-month highs.
June Comex gold futures closed at $2,038.10 an ounce Tuesday, up nearly $40 on the day.
Gold was reacting to a weaker dollar following a report showing U.S. job openings falling below ten million in February — their lowest level in nearly two years, according to the Job Openings and Labor Turnover Survey.
"The sharp fall in job openings in February shows that labor demand was cooling even before the recent banking turmoil and provides another reason to think that the Fed's tightening cycle is nearly over," said Capital Economics deputy chief U.S. economist Andrew Hunter.
Also, factory orders posted a second straight month of declines in February, down 0.7% after dropping 2.1% in January, the Commerce Department said on Tuesday.
According to analysts, all of this proves that the U.S. economy is slowing, increasing the odds of a potential rate cut later this year.
"After the dust settled today, Fed rate hike odds for the May meeting fell to a coin flip, while a rate cut is still getting priced in by the September meeting. If Wall Street becomes more convinced a recession will happen in the second half of this year, rate cut bets will grow," said OANDA senior market analyst Edward Moya.
On top of the data, markets were digesting JPMorgan Chase CEO Jamie Dimon's warning that the banking crisis was not over. "The current crisis is not yet over, and even when it is behind us, there will be repercussions from it for years to come," Dimon wrote in a 43-page annual letter.
Gold is now looking to approach record highs, and it might need more evidence of a slowing economy before that happens, added Moya.
"Gold investors now need to see further evidence that the service sector part of the economy is slowing, and that could help the big rally continue," he said. "Gold has its eye on record highs and that it might not take much to get there. If recession expectations continue to grow for the second half of the year, gold should have a path toward the $2,100 level."
Gold was not the only precious metal to rally. Silver May Comex futures were up nearly 5% on the day, trading at $25.18 an ounce, and platinum was up 3.46% on the day, with April futures last trading at $1,021 an ounce.
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