Gold steady, little changed early Monday, as the markets and the world waited for the outcome of this week’s U.S. presidential election, and Fed rate decision.
The race between former U.S. President Donald Trump and current Vice President Kamala Harris is too close to call, according to a number of polls. The election will be held Tuesday. The next day, the Fed begins its penultimate monetary policy meeting of the year at which it’s widely expected to cut interest rates again. The only question is by how much. The rate decision will be announced Thursday.
Front-month gold futures fell 0.2% last week to settle at $2,749.20 an ounce on Comex after the most-active December contract decreased 10 cents Friday. Bullion rose 3.4% in October after gaining 5.2% in September and advancing 2.2% in August. The metal is up 33% in 2024. The December contract is currently up $3.50 (+0.13%) an ounce to $2752.70 and the DG spot price is $2745.20.
The final U.S. monthly jobs report before both the election and the Fed meeting came out Friday and showed that employment increased by 12,000 in October. That was well below economists’ expectations for a 112,500 gain. The October point would be the weakest level since December 2020 if it holds. But numbers frequently get revised, and last month’s estimates were influenced by hurricanes, labor strikes and data collection issues, something economists had warned ahead of time might distort the data.
The jobs report last week followed the latest U.S. inflation data, which indicated that the cost of goods and services fell to near the Fed’s target level in September.
The Fed’s favorite inflation measure, the personal consumption expenditures price index, came at 2.1% year-on-year in September, almost at the Fed’s inflation target long-held inflation target of 2%. Though the top-level number approached the Fed’s goal, core PCE, which excludes volatile food and energy prices, was 2.7% year-on-year in September and increased 0.3% on a monthly basis.
The Fed has said it closely watches inflation and labor market data when setting monetary policy. Lower interest rates are typically bullish for gold, making the yellow metal a more attractive alternate investment asset.
The Fed is overwhelmingly expected to cut interest rates at the two scheduled policy meetings left this year, according to the CME FedWatch Tool. The central bank cut interest rates by 50 basis points in September 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. Of investors tracked by the tool. 82.8% are expecting rates to end the year at 4.25% to 4.50%.
Front-month silver futures fell 3.3% last week to $32.68 an ounce on Comex, after the December contract lost 0.4% Friday. Silver advanced 4.3% in October after rallying 7.9% in September and gaining 0.7% in August. It’s up 36% in 2024. The December contract is currently up $0.209 (+0.64%) an ounce to $32.890 and the DG spot price is $32.78.
Spot palladium slid 8% last week to $1,118.50 an ounce after declining 0.7% Friday. Palladium increased 11% in October after gaining 3.2% in September and rising 3.2% in August. Palladium is up 0.1% this year. Currently, the DG spot price is down $24.30 an ounce to $$1092.50.
Spot platinum fell 3.2% last week to $999.80 an ounce, though it edged up 0.1% Friday. Platinum rose 1.5% in October after increasing 5.6% in September and sliding 5.2% in August. Platinum has advanced 0.3% in 2024. The DG spot price is currently down $3.40 an ounce to $998.20.
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