Gold climbs off of early Wednesday losses, boosted by soft job numbers that offer some hope for the Fed putting the brakes on a possible Mid-September rate hike.
In August, private companies added 38,000 jobs well below the forecasted 47,000, making August the the slowest month since January, per private payroll company ADP. Most of the job growth was in education and health services, leisure and hospitality and construction. Manufacturing saw a loss of 17,000 jobs.
Prior to this morning’s jobs report, the yellow metal had slipped as bond yields rose on concerns about inflation and escalating attacks in the Middle East between the U.S. and Iran. That trajectory began late last week when Federal Reserve Chairman Kevin Warsh said the central bank might have more “work to do” in curbing inflation. The remarks triggered increased speculation about an interest rate hike sooner rather than later. Higher rates are typically bearish for gold, making it a less attractive alternate investment.
Investors will be closely watching the key U.S. monthly jobs report from the Labor Department for August, that is due out on Friday and the weekly initial jobless claims report for last week that comes out on Thursday. The Fed closely watches both inflation and the labor market when setting monetary policy.
December gold futures fell 1.9% Tuesday to settle at $4,396.40 an ounce on Comex, and the front-month contract declined 3% in the first two 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 up $28.40 (+0.65%) an ounce to $4424.80 and the DG spot price is $4382.00.
About 66% of the investors tracked by the CME FedWatch Tool are now expect the Fed to raise interest rates by 25 basis points at its next policy meeting Sept. 15-16, up from 36.6% a week ago. The remaining investors are betting on rates to remain unchanged this month.
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.
Fed Governor Michael Barr said Tuesday he would support a rate hike unless data gives him confidence that inflation is moving toward the central bank’s 2% target.
“However, if inflation appears not to be moderating sufficiently, then I think we should act decisively to raise rates,” he said.
Investors are also to watching inflationary risk from the war in Iran and the subsequent closure of the Strait of Hormuz. The U.S. launched new strikes on Iran and Tehran hit back, escalating the six-month-old conflict. Jordanian armed forces reported intercepting 10 ballistic missiles, and Bahrain also said it had intercepted Iranian drones. Hawkish news from the Iran war has pressured gold prices since the war began.
December silver futures dropped 2.4% Tuesday to settle at $65.37 an ounce on Comex, and the front-month contract fell 3.6% 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 up $0.176 (+0.27%) an ounce to $65.545 and the DG spot price is $65.49.
Spot palladium declined 3.2% Tuesday to $1,320.00 an ounce and is down 7.9% 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 up $24.90 an ounce to $1350.00.
Spot platinum fell 1.2% Tuesday to $1,765.40 an ounce and retreated 4.5% in the first two 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 up $13.40 an ounce to $1777.80.
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