Gold on the rise this morning as investors buy the dip with DG spot gold closing in once again on $3400 an ounce. The yellow metal had retreated early Monday in a likely technical correction after Friday’s rally following a weak jobs report that boosted speculation that the Federal Reserve would have to step up its timetable for interest rate cuts.
Gold gained the most in two months Friday after the key U.S. monthly employment report showed that the labor market added just 73,000 jobs last month, below economists’ expectations. The Bureau of Labor Statistics also revised gains for the two previous months significantly lower – by 258,000 jobs. The unemployment rate ticked up to 4.2% from 4.1% in June.
Investors also continued to watch how the rollout of Trump’s latest tariffs will play out. Late last week, he issued an order imposing global tariff rates effective Aug. 7 on more than 67 counties.
December gold futures edged up 0.2% last week to settle at $3,399.80 an ounce on Comex, after the front-month contract rallied 1.5% Friday. Bullion gained 1.2% in July after slipping 0.2% in June and losing 0.1% in May. It’s up 29% this year. The metal rose 27% in 2024, its biggest annual gain since 2010. The December contract is currently up $37.10 (+1.09%) an ounce to $3436.90 and the DG spot price is $3382.50.
Market watchers have warned in recent months that U.S. President Donald Trump’s tariff policies, immigration crackdowns and job cuts in the federal government could all affect labor market growth. Trump responded to Friday’s numbers by firing a key labor statistician.
The jobs report spurred increased bets that the Fed will begin cutting interest rates as early as next month. More than 89% of the investors tracked by the CME FedWatch Tool are now betting that the Fed will cut rates at its next policy meeting in September. That’s a switch from immediately after last week’s monetary policy decision, when most investors were betting on the Fed holding rates steady again in September. Lower interest rates are typically bullish for gold, making it a more attractive alternate asset.
There are only three scheduled Fed policy meetings left this year, in September, October and December. The central bank has held interest rates unchanged at 4.25% to 4.50% all year. 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.
The employment report came out the day after the Fed’s favorite inflation measure, the personal consumption expenditures price index, showed a pickup in June. The Fed has said it watches both inflation and the labor market as key economic data points when setting monetary policy.
Front-month silver futures lost 3.7% last week to settle at $36.93 an ounce on Comex, though the most-active September contract gained 0.6% Friday. Silver rose 1.5% in July after increasing 9.5% in June and adding 0.6% in May. It rose 21% in 2024. The September contract is currently up $0.481 (+1.30%) an ounce to $37.410 and the DG spot price is $37.33.
Spot palladium decreased 0.7% last week to $1,218.00 an ounce but rallied 1% Friday. Palladium climbed 8.8% in July after surging 14% in June and advancing 2.8% in May. Palladium dropped 17% last year. The DG spot price is currently up $3.90 an ounce to $1215.00.
Spot platinum fell 6.5% last week to $1,312.20 an ounce, though it rose 1.5% Friday. It dropped 3.9% in July after climbing 27% in June and rising 8.6% in May. Platinum lost 8.4% in 2024. The current DG spot price is up $41.20 an ounce to $1353.20.
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