Gold climbs on U.S. jobs report

Gold climbs on U.S. jobs report

Gold climbs on U.S. jobs report which showed some cooling in the economy. The news brought gold’s spot prices back above the $2000-an-ounce mark.

The U.S. economy created fewer jobs than expected in October, confirming expectations of a slowdown. Nonfarm payrolls increased by 150,000 for the month, per the Labor Department, that’s less than the forecast of an increase of 170,000. Gold jumped on the possibility that this would takid some heat off the Federal Reserve in its inflation fight.

The U.S. nonfarm payrolls report is closely watched as an indicator of labor market resilience, which helps determine the Federal Reserve’s next moves on monetary policy. The central bank kept interest rates unchanged at 5.25% to 5.50% Wednesday. It has raised interest rates only once since May but has boosted them 5.25 percentage points since March 2022 to curb inflation. But Fed Chair Jerome Powell signaled Wednesday that the Fed may be done with rate hikes.

Front-month gold futures rose 0.3% Thursday to settle at $1,993.50 an ounce on Comex, and the December contract slid 0.3% in the first four days of the week. Bullion gained 6.9% in October after falling 5.1% in September and dropping 2.2% in August. The metal is up 9.2% in 2023. The December contract is currently up $15.50 (+0.78%) an ounce to $2009.00 and the DG spot price is $1989.10.

Gold hovered just shy of the $2,000-an-ounce resistance level after surging about 10% over the past few weeks because of haven demand from the conflict in the Middle East. 

The prospect of a pause or cut in interest rates is also bullish for gold, which comes under pressure when rates are high. 

Powell said Wednesday that “the question we’re asking is: Should we hike more?” Speaking at a news conference, he said that “slowing down is giving us, I think, a better sense of how much more we need to do if we need to do more.” 

About 90.2% of investors tracked by the CME FedWatch Tool are betting that the Fed will keep its federal funds rate unchanged in December, while 9.8% expect it to raise rates by 25 basis points. 

In other economic news, private sector payrolls rose less than expected in October, by just 113,000, according to Wednesday’s monthly ADP Employment Report. The figure topped September’s 89,000 but missed estimates for 130,000. Separately, on Thursday, the U.S. weekly initial jobless claims data came in up slightly, increasing 5,000 to 217,000 in data from the Labor Department.  

The Fed closely watches both labor market data and inflation data when determining monetary policy. The core personal consumption expenditures price index, the Fed’s favorite inflation measure, accelerated to a four-month high in September as consumer spending picked up, data released last week showed.

Front-month silver futures increased 0.3% Thursday to settle at $22.85 an ounce on Comex, though the December contract slipped 0.2% in the first four days of the week. Silver increased 2.2% last month after decreasing 9.5% in September and slipping 0.6% in August. It’s down 5% in 2023. The December contract is currently up $0.449 (+1.97%) an ounce to $23.295 and the DG spot price is $23.07.

Spot palladium fell 4.3% Thursday to $1,119.50 an ounce, and it lost 1.3% in the first four days of the week. Palladium dropped 10% in October after rising 3% in September and sliding 5.3% in August. Palladium has plummeted 38% so far this year. The DG spot price is currently up $17.40 an ounce to $1133.50.

Spot platinum advanced 0.1% Thursday to $931.40 an ounce, and it rallied 2.7% in the first four days of the week. Platinum gained 3.5% in October after declining 6.6% last month and advancing 1.7% in August. Platinum is down 13% in 2023. The current DG spot price is up $7.40 an ounce to $937.00.

Disclaimer: This editorial has been prepared by Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or a recommendation regarding any particular security, commodity, or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities, or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand, and accept this disclaimer.