Gold ticks up after a key jobs report shows higher numbers for November than expected, but the bullion appears to be aiming for a second consecutive weekly drop.
November saw an unexpected rise in nonfarm payrolls that increased by 227,000, the Bureau of Labor Statistics reported Friday. That slightly beats the Dow Jones consensus estimate of 214,000. The unemployment rate edged higher to 4.2%, as expected.
The Fed has said it closely watches both inflation and jobs data when determining monetary policy. Investors are awaiting the report for signals on whether the Fed is likely to move forward with anticipated interest rate cuts this month and beyond. Rate reductions would be considered bullish for gold, but a pause or delay would be bearish, making the yellow metal a less attractive asset for investors.
Reports out earlier this week signaled sluggish hiring. The U.S. private payrolls report from ADP for November came in below expectations on Wednesday, while new applications for U.S. unemployment claims edged up last week in data released Thursday.
Front-month gold futures fell 1% Thursday to settle at $2,648.40 an ounce on Comex, and the most-active February contract was down 1.2% in the first four days of the week. Bullion dropped 2.5% last month after rising 3.4% in October and gaining 5.2% in September. The metal is up 28% in 2024.
Private companies added 146,000 jobs last month, below economists’ estimate for 163,000 and the downwardly revised figure of 184,000 for October, according to the ADP report. Weekly initial jobless claims rose 9,000 to a seasonally adjusted 224,000 for the week ended Nov. 30, above the 215,000 forecast by economists.
Fed Chairman Jerome Powell spoke Wednesday and said the central bank is watching the labor market closely but can afford to be cautious with monetary policy.
“The U.S. economy is in very good shape, and there’s no reason for that not to continue,” he said at a New York Times event. “The downside risks appear to be less in the labor market, growth is stronger than we thought, and inflation has come in a little higher…. So the good news is that we can afford to be a little more cautious as we try to find neutral.”
Fed policymakers voted unanimously at November’s meeting to cut interest rates by 25 basis points to 4.50% to 4.75%. The central bank also cut rates in September. Before those reductions, the Fed had kept rates at 5.25% to 5.50% for a year after raising them by 5.25 percentage points since March 2022. The Fed began raising rates during the pandemic to combat surging inflation.
About 86% of the investors tracked by the CME FedWatch Tool are betting that the Fed will cut rates by another 25 basis points Dec. 18, ending the year at 4.25% to 4.50%. The rest expect the central bank to keep rates unchanged this month.
Front-month silver futures declined 1.2% Thursday to $31.54 an ounce on Comex, but the most-active March contract increased 1.4% in the first four days of the week. Silver fell 5.2% in November after advancing 4.3% in October and rallying 7.9% in September. It’s up 31% in 2024.
Spot palladium slid 2.1% Thursday to $976.00 an ounce, and it’s down 1.9% so far this week. Palladium decreased 12% last month after increasing 11% in October and gaining 3.2% in September. Palladium is down 13% this year. The current DG spot price is down $8.40 an ounce to $970.00.
Spot platinum lost 1.3% Thursday to $941.00 an ounce, and it slid 1.6% in the first four days of the week. Platinum declined 4.2% in November after rising 1.5% in October and increasing 5.6% in September. Platinum is down 5.7% this year. The DG spot price is currently down $4.60 an ounce to $937.00.
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