Gold drops on surprising U.S. jobs number in the key monthly report for August, the latest economic indicator being watched for signals on whether the Federal Reserve will raise or leave interest rates unchanged at its meeting this month. The strong number ups the fears that the Fed will raise the interest rates later this month.
The U.S. economy bounced back strong in August, adding 162,000 jobs, reversing a lackluster summer, while the unemployment rate held steady at 4.1% per the Bureau of Labor Statistics. The jobs number far exceeds the forecasted 53,000 increase, making August’s total the strongest monthly gain since March.
The yellow metal had erased the week’s losses on Thursday, and then some, after Fed Governor Christopher Waller said he’d be willing to hold rates steady if price pressures continue to show signs of easing. The Fed closely watches both inflation and the labor market when setting monetary policy. A rate hike would be considered bearish for gold, making it less attractive than other assets, so holding rates steady gave the precious metal a boost.
Earlier this week, data from ADP showed that private companies added fewer jobs than expected in August. Additionally, initial jobless claims data from the Labor Department on Thursday showed new applications for unemployment benefits ticked back up last week.
December gold futures rose 2.8% Thursday to settle at $4,539.90 an ounce on Comex, and the front-month contract advanced 0.2% in the first four days of the week. Bullion rose 9.1% last month after gaining 1.7% in July, its first monthly increase since February, and sliding 12% in June. It decreased 7% in the first half of 2026 after rallying 64% last year. The December contract is currently down $81.80 (-1.80%) an ounce to $4458.10 and the DG spot price is $4426.00.
Waller said his vote at this month’s Fed policy meeting will be “heavily influenced” by August inflation data due next week, saying that “if inflation comes in hot, I would consider a rate hike.”
Producer price index and consumer price index data for August are due out at the end of next week.
This morning’s jobs data prompted a marked change to the number of investors tracked by the CME FedWatch Tool who believe a rate hike is on the way. Yesterday, just over 49% felt the Fed would raise interest rates by 25 basis points at its next policy meeting Sept. 15-16, but this morning, over 60% feel a rate hike is imminent.
The central bank held interest rates steady at 3.5% to 3.75% last month, but dissenters signaled growing support for a rate hike in 2026, and the minutes indicated broader support for rate increases if inflation doesn’t go down. The Fed has kept interest rates unchanged this year after three previous rate cuts.
Investors are also to watching inflationary risk from the conflict between the U.S. and Iran and the subsequent closure of the Strait of Hormuz. Hawkish news from the Iran war has pressured gold prices since the war began.
December silver futures increased 3.4% Thursday to settle at $67.70 an ounce on Comex, and the front-month contract fell 0.1% so far this week. The most-active contract touched a record above $115 in January. Silver climbed 16% last month after sliding 3.6% in July and declining 21% in June. It lost 15% in the first half of 2026 after rising 141% last year. The December contract is currently down $1.534 (-2.27%) an ounce to $66.170 and the DG spot price is $66.00.
Spot palladium gained 6% Thursday to $1,434.50 an ounce and is up 0.1% this week. Palladium rallied 5.7% last month after adding 5.8% in July and dropping 11% in June. It retreated 25% in the first half of 2026 after rising 74% last year. Currently, the DG spot price is down $22.90 an ounce to $1409.00.
Spot platinum rose 4.3% Thursday to $1,835.50 an ounce but retreated 0.8% in the first four days of the week. Platinum rose 7.5% last month after gaining 6.6% in July and tumbling 19% in June. Platinum slid 23% in the first half of 2026 after increasing 122% in 2025. The DG spot price is currently down $12.90 to $1818.10.
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