Gold Notches Weekly Uptick as Employment Data Clears Rate Cutting Path
Last week, gold and silver slipped as easing Middle East tensions dented bullion's safe-haven appeal. This week, markets were driven by U.S. economic data, which was likely to influence the Fed’s rate-cutting path.
Large gains in the tech sector boosted major Wall Street averages on Monday, leading to record closes for the Nasdaq Composite and S&P 500. On the same day, gold snapped a four-session winning streak as the dollar index jumped by 0.7%.Gold and silver ended Monday’s trading slightly lower at respective closing prices of $2,631 and $30.25, as investors braced for a full week of economic data.
On Tuesday, the Labor Department reported that U.S. job openings rose in October, while the number of workers leaving jobs for new opportunities rose to a five-month peak. Gold trimmed some of its initial gains following the employment report, as the stronger economic data increased the odds of a more cautious approach to rate cutting, by the Federal Reserve.
Gold edged higher on Wednesday following news from payroll company ADP, which revealed softening U.S. private sector job growth as 146,000 jobs were created in November against forecasts of 166,000. The disappointing jobs data boosted the odds of a final 2024 rate cut, which led to modest gains for gold and silver as the pair ended Wednesday’s trading at $2,648 and $30.28, respectively.
Wall Street investors focused on the private earnings data within the ADP report, which showed a year-over-year salary jump of 4.8% for workers who remained in their positions for over two years. This marked the first wage increase in over two years for the so-called job stayers. This data, along with increased rate cutting odds led to broad gains for U.S. stocks and record closes for all three major averages.
On Thursday, gold and silver encountered steep selling pressure as investors braced for Friday’s key employment report, which would provide extra clarity on the Fed’s next steps. By Thursday’s close, gold dipped by 0.75%, ending the day at $2,629. Elsewhere, the stock market rally paused, and Bitcoin broke above $100,000 for the first time, as Friday’s employment report loomed.
Gold and silver were modestly higher today, following the key Labor Department report which revealed that non-farm payrolls increased by 227,000 when 200,00 was expected. This data fell firmly within expectations and suggested the Fed would likely proceed with a 0.25 rate cut at the central bank’s December 17th meeting.
At the time of writing, gold is slightly higher on the week, at $2,635 while silver is eying a 2.6% weekly downturn at $31 an ounce. Stocks were mixed following the final employment report of 2024. OF the three major averages, the Nasdaq posted the most significant weekly uptick of 3.07% while the S&P 500 ended the week 0.75% higher. Lagging other indexes, the Dow Jones Industrial Average shed 0.65% on a weekly basis.