Gold gains on Friday morning’s jobs data which missed expectations. The jobs data combines with yesterday’s U.S. inflation data to pave the way for further interest rate decreases.
October’s nonfarm payrolls increased by just 12,000, a sharp decline from September and below the forecast of 100,000 jobs. The unemployment rate held in line with expectations at 4.1%. Gold prices rose on the news, rebounding from Thursday’s profit-taking dip after the precious metal hit a record high of $2,790.15. Spot gold added 0.4% to $2,754 per ounce on the jobs report.
Gold is also getting a boost from haven demand associated with uncertainty over the U.S. election, which will be held Nov. 5. Former U.S. President Donald Trump and current Vice President Kamala Harris are almost tied in polls for the presidential race.
Front-month gold futures fell 1.8% Thursday to settle at $2,749.30 an ounce on Comex, and the most-active December contract decreased 0.2% in the first four days of the week. Bullion rose 3.4% in October after gaining 5.2% in September and advancing 2.2% in August. The metal is up 33% in 2024. The December contract is currently up $17.80 (+0.65%) an ounce to $2767.10 and the DG spot price is $2757.60.
The Fed’s favorite inflation measure, the personal consumption expenditures price index, came at 2.1% year-on-year in September, almost at the Fed’s inflation target long-held inflation target of 2%. The figure Thursday was in line with economists’ estimates, as was the 0.2% increase for the month.
Though the top-level number approached the Fed’s goal, core PCE, which excludes volatile food and energy prices, was 2.7% year-on-year in September and increased 0.3% on a monthly basis.
The Fed is overwhelmingly expected to cut interest rates at the two scheduled policy meetings left this year, according to the CME FedWatch Tool. The central bank cut interest rates by 50 basis points in September to 4.75% to 5.00%. It had kept them at 5.25% to 5.50% for a year after raising them by 5.25 percentage points since March 2022 to rein in inflation. Currently, 83.2% of investors tracked by the tool are expecting rates to end the year at 4.25% to 4.50%.
The October jobs data out this week will probably also influence the rate decision. In addition to Friday’s U.S. monthly jobs report, the private payrolls report from ADP on Wednesday showed better-than-expected growth in October when the data came out Wednesday. September was the best month since July 2023.
Separately, weekly U.S. initial jobless claims data for last week, which came out Thursday, showed applications for new unemployment benefits fell to a five-month low.
Front-month silver futures fell 3.7% Thursday to $32.80 an ounce on Comex, and the December contract lost 2.9% in the first four days of the week. Silver advanced 4.3% in October after rallying 7.9% in September and gaining 0.7% in August. It’s up 36% in 2024. The December contract is currently up $0.359 (+1.09%) an ounce to $33.155 and the DG spot price is $33.02.
Spot palladium declined 3.1% Thursday to $1,126.00 an ounce and is down 7.4% so far this week. Palladium increased 11% in October after gaining 3.2% in September and rising 3.2% in August. Palladium is up 0.8% this year. Currently, the DG spot price is up $16.40 an ounce.
Spot platinum fell 2% Thursday to $998.70 an ounce and slid 3.3% in the first four days of the week. Platinum rose 1.5% in October after increasing 5.6% in September and sliding 5.2% in August. Platinum has advanced 0.1% in 2024. The DG spot price is currently up $9.70 an ounce to $1007.30.
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