Gold rises as silver traded near a record high early Wednesday amid mounting expectations of lower U.S. interest rates and silver supply tightness. Rate cut hopes were boosted by this morning’s negative jobs report.
The U.S. labor market slump grew in November as private companies cut 32,000 workers per this morning’s report from payrolls processing firm ADP, well below the Dow Jones consensus estimate from economists for an increase of 40,000. Small businesses were hit the hardest.
The September import price index and industrial production data, which were delayed by the U.S. government shutdown, are due out Friday.
Most investors are expecting Federal Reserve to cut interest rates for a third meeting in a row next week. A rate cut would be considered bullish for precious metals, making them a more attractive alternate investment.
The Fed’s favorite inflation measure, the personal expenditures price index, is expected to be released Friday and may influence the following week’s monetary policy decision by Fed officials. The government shutdown in October and part of November delayed a lot of economic data, keeping policymakers largely blind when considering the state of the economy.
February gold futures fell 1.3% Tuesday to settle at $4,220.80 an ounce on Comex, and the most-active contract lost 0.8% in the first two days of the 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 60% this year. The metal rose 27% in 2024, its biggest annual gain since 2010. The February contract is currently up $20.30 (+0.48%) an ounce to $4241.50 and the DG spot price is $4218.20.
March silver futures decreased 0.8% Tuesday to settle at $58.70 an ounce on Comex, though the most-active contract rallied 2.7% in the first two days of the week. Silver increased 19% in November after rising 3.3% in October and adding 15% in September. It’s up 101% this year after rising 21% in 2024. The March contract is currently up $0.207 (+0.35%) an ounce to $58.910 and the DG spot price is $58.42.
Investors are pricing in a 25 basis point cut at next week’s Fed meeting. More than 88% of the investors tracked by the CME FedWatch Tool are betting that the Fed will cut rates by 25 basis points Dec. 10, while the rest expect rates to stay unchanged.
October’s interest rate reduction to 3.75% to 4.00% was the second 25-basis point reduction in a row. 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.
Spot palladium increased 1.8% Tuesday to $1,472.00 an ounce after gaining 1.5% in the first two days of the week. Palladium added 0.5% in November after rising 14% in October and gaining 14% in September. Palladium is up 59% this year after dropping 17% in 2024. Currently, the DG spot price is down $13.90 an ounce to $1460.00.
Spot platinum retreated 1.9% Tuesday to $1,638.20 an ounce and is down 1.1% so far this week. It climbed 4.7% in November after rising 1% in October and gaining 15% in September. Platinum is up 79% in 2025 after losing 8.4% in 2024. The DG spot price is currently up $2.70 an ounce to $1648.70.
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