Gold boosts on this morning’s key jobs report that shows slowing growth, leading to hopes of interest rate cuts. Talk of tariffs and a trade war are risk strengthening, which supports gold.
Private sector job creation missed expectations for December and wages grew at the slowest pace in nearly 3½ years, per ADP’s report this morning. Companies added 122,000 jobs for the month, down from 146,000 in November and less than the Dow Jones consensus forecast of 136,000. Wages grew at a 4.6% rate from a year ago, the slowest pace since July 2021. Spot gold has risen over $20 an ounce this morning on the news.
Prices came under some pressure amid higher Treasury yields and a stronger dollar, but the yellow metal maintained its role as a hedge against geopolitical and economic uncertainty following comments from President-elect Donald Trump about buying Greenland, taking control of the Panama Canal and annexing Canada.
Investors are likely to obtain further direction from the minutes of the December Fed meeting coming later today, which will be parsed closely for indications on whether the central bank will continue with the interest rate cuts it started in 2024. Additionally, the key U.S. monthly jobs report for December and consumer sentiment data are due out Friday.
Front-month gold futures rose 0.7% Tuesday to settle at $2,665.40 an ounce on Comex, and the most-active February is up 0.4% so far this week. 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 up $14.5 (+0.54%) an ounce to $2679.90 and the DG spot price is $2666.90.
U.S. financial markets and most government offices will shutter Thursday, the day of former U.S. President Jimmy Carter’s funeral, for a national day of mourning.
More than 93% 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.
The Fed’s benchmark interest rate is currently at 4.25% to 4.50% after rate cuts in September, November and December. 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.
The Fed has said it closely watches both inflation and labor market data when setting monetary policy.
Front-month silver futures rallied 0.3% Tuesday to $30.69 an ounce on Comex, and the most-active March rose 2.1% in the first two days of the week. 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 up $0.249 (+0.81%) an ounce to $30.935 and the DG spot price is $30.25.
Spot palladium increased 1.1% Tuesday to $939.50 an ounce and but is down 0.1% so far this week. 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 $8.00 an ounce to $932.00.
Spot platinum rose 2.8% Tuesday to $966.50 an ounce and gained 1.5% in the first two days of the week. 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 up $7.40 an ounce to $963.50.
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