Gold rose early Wednesday from a one-week low on safe haven buying, shrugging off Wednesday morning’s stronger than expected ADP jobs report.
Private company payrolls ticked up in October, beating the forecast and raising hopes about the labor market, ADP reported Wednesday. Companies added 42,000 jobs for the month, following a decline of 29,000 in September and topping the Dow Jones consensus estimate for a gain of 22,000. A strong jobs market tends to reduce the chance of rate cuts and can even keep rates higher for longer.
Nongovernmental reports like this one are among the few economic indicators that markets can count on for insight into the state of the U.S. economy amid the federal government shutdown, which extended into a 36th day, becoming the longest in history. ADP will begin issuing weekly jobs numbers, based on a four-week average, on Tuesdays starting next week, the company announced last week. The Bureau of Labor Statistics, which typically releases the weekly initial jobless claims report and the key U.S. monthly jobs report, is shuttered along with the rest of the federal government and providing no data.
December gold futures fell 1.3% Tuesday to settle at $3,960.50 an ounce on Comex, and the front-month contract lost 0.9% in the first two days of the week. Bullion increased 3.2% last month after surging 10% in September, the most in six months, and adding 5% in August. It’s up 50% this year. The metal rose 27% in 2024, its biggest annual gain since 2010. The December gold contract is currently up $23.20 (+0.59%) an ounce to $3983.70 and the DG spot price is $3978.00.
The Federal Reserve closely follows jobs and inflation data when setting monetary policy. The central bank is widely expected to cut interest rates for a third consecutive time in December, though Chairman Jerome Powell suggested last week that that might not happen.
Speculation on the Fed and the government shutdown have triggered market uncertainty that’s fueling some haven demand, along with various global conflicts.
Last week, the Fed reduced interest rates to 3.75% to 4.00%.
Over 70% of the investors tracked by the CME FedWatch Tool are betting that the Fed will reduce rates by another 25 basis points in December. The rest anticipate that the Fed will leave rates unchanged. The cut last week 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.
Front-month silver futures fell 1.6% Tuesday to settle at $47.29 an ounce on Comex, and the December contract slid 1.8% in the first two days of the week. Silver gained 3.3% in October after rising 15% in September, the biggest monthly rally in two and a half years, and climbing 11% in August. It rose 21% in 2024. The December contract is currently up $0.469 (+0.99%) an ounce to $47.760 and the DG spot price is $48.05.
Spot palladium lost 2.9% Tuesday to $1,412.00 an ounce and is down 2.2% so far this week. Palladium rose 14% last month after rising 14% in September and declining 7.8% in August. Palladium dropped 17% last year. The current DG spot price is up $16.50 an ounce to $1427.00.
Spot platinum decreased 2.3% Tuesday to $1,546.80 an ounce and is down 2.3% this week. It advanced 1% in October after gaining 15% in September and rising 5.9% in August. Platinum lost 8.4% in 2024. The DG spot price is currently slightly down $1.40 an ounce to $1559.30.
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