Gold steadies after bobbling a bit on this morning’s U.S. jobs report as it heads for a weekly rally amid uncertainty around U.S. trade policy. The yellow metal made up for the ground it lost in overnight profit taking.
February’s U.S. job growth was weaker than expected the Labor Department’s Bureau of Labor Statistics reported Friday. Nonfarm payrolls rose by a seasonally adjusted 151,000 for the month, better than January’s downwardly revised 125,000, but less than the 170,000 Dow Jones forecast. The unemployment rate edged higher to 4.1%. The Fed has said it closely watches both inflation and the labor market when determining monetary policy.
Markets have swung this week after U.S. President Donald Trump implemented new tariffs on the country’s largest trading partners on Tuesday only to suspend the 25% duties on goods from Canada and Mexico on Thursday. The alternating trade policy has increased worries that inflation will climb and economic growth will slow. The U.S. dollar also traded near a four-month low, bolstering gold as an alternate investment.
Meanwhile, February saw a slowing of the flow of gold from London vaults into the United States, per the London Bullion Market Association (LBMA). The inflow to the Comex stocks has significantly slowed down in recent weeks as the premium between U.S. gold futures and London spot prices resumed normal levels. The amount of gold stored in the London vaults at the end of February fell by 0.7% month on month to 8,477 metric tons, a five-year low. In January, the London holdings dropped by 1.7%. The movement was prompted by the price swings between the two countries that was driven by tariff concerns.
April gold futures rose 60 cents Thursday to settle at $2,926.60 an ounce on Comex and the most-active contract gained 2.7% in the first four days of the week. Bullion rose 0.5% last month after gaining 7.3% in January and dropping 1.5% in December. The metal rose 27% in 2024, its biggest annual gain since 2010.
The state of the labor market and the economy are seen as critical to the Federal Reserve’s next moves on monetary policy, which is why the jobs report will be so closely followed. Interest rate cuts are bullish for gold, making the yellow metal a more attractive investment than some other assets.
The Fed cut rates three times in 2024, but most investors aren’t pricing in a Fed rate reduction until May or June, according to investors tracked by the CME FedWatch Tool. About 97% expect rates to remain unchanged in March, compared with 3% anticipating a 25 basis point cut.
Federal Reserve Governor Christopher Waller said Thursday that he still anticipates room to cut rates two or three times this year, though not in March: “If the labor market, everything, seems to be holding, then you can just kind of keep an eye on inflation,” he said at the Wall Street Journal CFO Network Summit.
The Fed kept its benchmark interest rate at 4.25% to 4.50% in January. It was the central bank’s first policy meeting since July 2024 without a rate cut. The Fed 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. Previously, the Fed had kept rates at 5.25% to 5.50% for a year.
The Fed’s favorite inflation measure came out last week and showed that core prices of goods were in line with expectations.
Front-month silver futures added 0.6% Thursday to settle at $33.34 an ounce on Comex, and the May contract increased 5.9% in the first four days of the week. Silver retreated 2.4% in February after adding 10% in January and dropping 6% in December. It gained 21% in 2024. The May contract is currently down $0.348 (-1.04%) an ounce to $32.990 and the DG spot price is $32.67. The May contract is currently up $3.90 (+0.13%) an ounce to $2930.50 and the DG spot price is $2929.20.
Spot palladium rose 1% Thursday to $956.00 an ounce and rallied 2.9% so far this week. Palladium retreated 10% in February after advancing 11% in January and falling 6.7% in December. Palladium dropped 17% last year. The current DG spot price is up $10.30 an ounce to $964.00.
Spot platinum gained 0.8% Thursday to $978.10 an ounce and is up 3.7% this week. Platinum slid 4.7% last month after gaining 8.4% in January and losing 4.6% in December. Platinum slid 8.4% in 2024. The DG spot price is currently down $3.90 an ounce to $977.80.
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