Gold slipped early Friday but headed for a weekly gain as the markets considered the week’s mixed economic data. Both gold and silver are heading for their best annual performances since 1979.
A U.S. inflation gauge came in lower than expected Thursday, though the U.S. unemployment rate unexpectedly climbed in November to the highest level since September 2021, in data released Tuesday. The Federal Reserve closely watches both inflation and labor market data when setting monetary policy.
February gold futures fell 0.2% Thursday to settle at $4,364.50 an ounce on Comex, though the most-active contract is up 0.8% so far this week. Bullion gained 6.5% last month after increasing 3.2% in October and surging 10% in September, the most in six months. It’s up 65% this year. The metal rose 27% in 2024, its biggest annual gain since 2010. The February contract is currently down $6.60 (-0.15%) an ounce to $4357.90 and the DG spot price is $4327.00.
Geopolitical uncertainty bolstered gold and also firmed up the U.S. dollar, which makes gold a less attractive investment to holders of other currencies.
The consumer price index data for November, which was delayed by the U.S. federal government shutdown in the fall, showed prices rose at a 2.7% annual rate last month, below analysts’ expectations of 3.1%. Excluding volatile food and energy prices, core CPI also came in at 2.6% for the year, compared with analysts’ expectations of 3%. The government canceled the October CPI release so the report didn’t have full comparisons.
Cooling inflation might ease the path for the Fed to cut U.S. benchmark inflation rates even further, especially if the labor market is considered weak. The latest jobs numbers on Tuesday showed that U.S. nonfarm payrolls rose by 64,000 in November, above analyst expectations, but the results were considered mixed because of a large decline in October data which reflected cuts to the federal workforce.
The Fed cut interest rates for a third consecutive time last week to 3.50% to 3.75% and maintained their outlook for just one interest rate cut in 2026. The central bank began raising interest rates in March 2022 to fight inflation, ultimately imposing increases of by 5.25 percentage points before beginning rate cuts last year.
President Donald Trump is due to appoint a successor to Fed Chairman Jerome Powell early in the year and is likely to name someone who shares his desire for lower interest rates.
About 80% of investors are betting that the Fed will keep interest rates unchanged at the next policy meeting at the end of January, according to figures tracked by the CME FedWatch Tool. About 19% expect another 25 basis point cut.
Lower interest rates are typically considered bullish for precious metals, making them a more attractive alternate investment.
Separately, the Bank of Japan raised interest rates to 30-year highs on Friday and signaled more hikes will come.
March silver futures dropped 2.5% Thursday to settle at $65.22 an ounce on Comex, though the most-active contract rallied 5.2% in the first four days of the week. The white metal hit a series of record highs last week on a historic squeeze in the London market. Silver increased 19% in November after rising 3.3% in October and adding 15% in September. It’s up 123% this year after rising 21% in 2024. The March contract is currently up $0.746 (+1.14%) an ounce to $65.965 and the DG spot price is $65.91.
Spot palladium gained 4.2% Thursday to $1,715.00 an ounce after advancing 13% so far this week. Palladium added 0.5% in November after rising 14% in October and gaining 14% in September. Palladium is up 85% this year after dropping 17% in 2024. Currently, the DG spot price is down $11.30 an ounce to $1686.50.
Spot platinum increased 1.1% Thursday to $1,925.50 an ounce and rallied 9.7% in the first four days of the week. It climbed 4.7% in November after rising 1% in October and gaining 15% in September. Platinum is up 111% in 2025 after losing 8.4% in 2024. The DG spot price is currently up $22.10 an ounce to $1951.00.
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