Gold rallies early Wednesday to a new record high on election-related haven demand as investors eye the uncertainty surrounding the upcoming U.S. presidential election. The yellow metal shrugged off this morning’s positive jobs report, keeping spot gold near $2,789.73, its newly claimed high.
October’s private-job creation leapt to its highest level in over a year, per this morning’s ADP report. That’s despite a devastating storm season and major labor disruptions. Companies hired 233,000 new workers during the month, far ahead of the Dow Jones estimate for 113,000. ADP said it was the best month for job creation since July 2023.
Investors are awaiting further direction at the end of the week from key U.S. inflation and jobs reports for indications on the Federal Reserve’s future moves. The Fed has said it closely watches inflation and labor market data when setting rates. The U.S. election will be held Nov. 5.
Separately, Indian gold buyers were ramping up purchases ahead of the Diwali holiday even amid near-record prices.
Front-month gold futures rose 0.9% Tuesday to settle at $2,781.10 an ounce on Comex, and the most-active December contract increased 1.9% in the first two days of the week. Bullion is up 4.6% so far this month after gaining 5.2% in September and advancing 2.2% in August. The metal is up 35% in 2024. The December contract is currently up $7.80 (+0.28%) an ounce to $2788.90 and the DG spot price is $2780.50.
Goldman Sachs raised its gold price forecast to $2,900 an ounce by early 2025 from a previous estimate of $2,700 amid central bank buying of gold bars, particularly in emerging markets, as well as haven demand around the election, geopolitical risks and declining interest rates.
Former U.S. President Donald Trump and current Vice President Kamala Harris are neck-and-neck in the presidential race, with the election likely to be decided days later by the contests in the seven swing states of Arizona, Georgia, Michigan, Nevada, North Carolina, Pennsylvania and Wisconsin.
Expectations of lower interest rates are also fueling gold’s rally, with the next major economic indicators due this week. Lower interest rates make gold a more attractive investment.
The Fed’s favorite inflation measure, the personal consumption expenditures price index, comes out Thursday with September data. It will be followed Friday by the U.S. monthly employment report for October. Thursday also brings the weekly U.S. initial jobless claims data for last week.
Most investors tracked by the CME FedWatch Tool expect the Fed to cut rates again Nov. 7, with 96.8% anticipating a 25 basis point reduction and the rest are betting on a 50 basis point cut. The central bank has two scheduled policy meetings left this year. Most investors tracked by the tool are expecting rates to end the year at 4.25% to 4.50%.
The central bank cut interest rates by 50 basis points last month 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.
Front-month silver futures rose 1.3% Tuesday to $34.44 an ounce on Comex, and the December contract gained 3.6% in the first two days of the week. Silver is up 9.5% in October after rallying 7.9% in September and gaining 0.7% in August. It’s up 43% in 2024. The December contract is currently down $0.566 (-1.64%) an ounce to $33.875 and the DG spot price is $33.86.
Spot palladium gained $1 Tuesday to $1,235.50 an ounce and is up 13% so far this week. Palladium is up 22% in October after gaining 3.2% in September and rising 3.2% in August. Palladium is up 11% this year. Currently, the DG spot price is down $68.30 an ounce to $1165.00.
Spot platinum advanced 1% Tuesday to $1,055.20 an ounce and gained 3.6% in the first two days of the week. Platinum is up 7.3% in October after increasing 5.6% last month and sliding 5.2% in August. Platinum has advanced 5.8% in 2024. The DG spot price is currently down $30.80 an ounce to $1024.50.
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.