Gold softened early Monday as investors continue to digest Friday’s jobs report and the boosted dollar while awaiting this week’s key inflation reports for further direction. Underlying safe-haven demand amid uncertainty around President-elect Donald Trump’s policies curbed losses.
The U.S. producer price index for December is scheduled to come out Tuesday, followed by the consumer price index on Wednesday. The reports are seen as important indicators for the Federal Reserve’s monetary policy decisions, along with jobs reports.
The U.S. monthly jobs report for December showed Friday that payrolls rose much more than expected last month and the unemployment rate fell. That could potentially signal that the Fed could retain restrictive monetary policy – higher interest rates – without damaging the labor market. Higher interest rates are typically considered bearish for gold, because they make gold a less attractive alternate investment.
Front-month gold futures rose 2.3% last week to settle at $2,715.00 an ounce on Comex, after the most-active February contract added 0.9% Friday. Bullion dropped 1.5% in December after losing 2.5% in November and rising 3.4% in October. The metal gained 27% in 2024, its biggest annual gain since 2010. Gold’s 2024 rally was spurred by the Fed, the economy and global central bank buying cycles. The February contract is currently down $28.70 (-1.06%) an ounce to $2686.30 and the DG spot price is $2671.00.
U.S. nonfarm payrolls surged by 256,000 last month, above the forecast for 155,000 and the 212,000 in November, according to data released Friday by the Labor Department. The unemployment rate slipped to 4.1%.
The Fed reduced its benchmark interest in September, November and December. It’s now at 4.25% to 4.50%. Previously, the central bank had kept rates at 5.25% to 5.50% for a year after raising them by 5.25 percentage points since March 2022 to combat inflation. Higher rates are considered bearish for gold, making it less attractive as an alternate investment to other assets.
More than 97% of the investors tracked by the CME FedWatch Tool are now betting that the Fed will keep rates unchanged at the end of this month. The rest expect another 25 basis point cut.
Front-month silver futures rallied 4.2% last week to $31.31 an ounce on Comex, after the most-active March contract rose 1% Friday. Silver dropped 6% in December after falling 5.1% in November and advancing 4.3% in October. It gained 21% in 2024. The March contract is currently down $0.959 (-3.06%) an ounce to $30.355 and the DG spot price is $29.87.
Spot palladium increased 1.9% last week to $958.50 an ounce and gained 1.7% Friday. Palladium fell 6.7% in December after sliding 12% in November and increasing 11% in October. Palladium dropped 17% last year. Currently, the DG spot price is down $23.40 an ounce to $950.00.
Spot platinum rose 1.7% last week to $968.60 an ounce after edging up 0.2% Friday. Platinum lost 4.6% last month after declining 4.2% in November and rising 1.5% in October. Platinum slid 8.4% in 2024. The DG spot price is currently down $15.20 an ounce to $968.90.
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