Gold Gains and Stocks Slump Following Upbeat Jobs Data
Having secured a modest gain of 0.5% last week, gold appeared to be conflicted throughout this week as Treasury yields pressured bullion to the downside, while safe-haven inflows buoyed precious metals prices. This week, investors were particularly focused on FOMC meeting minutes set for release Wednesday and U.S. employment data due out this morning.
Precious metals initially encountered pressure on Monday morning, as the 30-year Treasury yield reached a two-month high of 4.837%. However, gold and silver ended Monday’s trading slightly higher at respective closing prices of $2,633 and $30.31. Major Wall Street averages were mixed on Monday, as tech shares surged, despite pressure coming from bond yields.
Precious metals remained confined to a tight trading range throughout Tuesday, as traders weighed stronger-than-expected U.S. economic data which seemingly increased the odds that interest rates would remain higher throughout 2025. As a result, gold was modesty higher, at $2,651 by Tuesday’s close. Meanwhile, Wall Street stocks turned in another mixed performance. Most notably, the Nasdaq Composite shed 1.9% during Tuesday’s trading.
Yields climbed again on Wednesday, after the release of the Federal Reserve's FOMC meeting minutes, which signaled a commitment to keeping interest rates higher for longer to combat inflation. In contrast to the Fed’s meeting minutes, Fed Governor Christopher Waller expressed confidence that inflation would fall in 2025, lending support to further rate cuts. As a result, gold notched its second daily gain, at $2,662 while silver saw little change near $30.12 an ounce.
Bond markets closed early on Thursday as part of the National Day of Mourning for former President Jimmy Carter, while the NYSE and Nasdaq remained fully closed in observance. Gold and silver edged higher during Trading on Thursday, as safe-haven demand from a U.K. budget crisis bolstered demand for bullion. By Thursday’s close, gold managed a 0.5% gain at $2,675, while silver was modestly higher at $30.28.
This morning, the Labor Department’s widely anticipated employment report was released, which revealed that U.S. job growth grew unexpectedly in December, while the unemployment rate fell to 4.1%. This morning’s upbeat jobs report supported the Fed’s higher-for-longer stance for rate cuts in 2025.
Stocks slumped this morning, as fears of higher interest rates and sticky inflation dented risk appetite.
Yet, major averages wiped out all year-to-date gains as the Nasdaq Composite both suffered 1.3% weekly losses. Meanwhile, the S&P 500 fared slightly better, with a 1% weekly downturn.