Gold prices experienced an uptick on Friday, driven by a weakening U.S. dollar in response to private-sector job reports that indicated notable fragility in the nation’s labor market. This development has in turn heightened expectations for another interest rate cut by the U.S. Federal Reserve. Additionally, the ongoing government shutdown has intensified the demand for safe-haven assets like gold.
As of 0341 GMT, spot gold was trading at $3,994.03 per ounce, marking a 0.4% increase. However, it is set to close the week with a loss of 0.3%. This follows a significant drop of nearly 8% since reaching an all-time high of $4,381.21 on October 20. U.S. gold futures for December delivery rose 0.3% to reach $4,004.40 per ounce.
The recent job reports revealed that the U.S. economy shed jobs in October, particularly in the government and retail sectors, compounded by cost-cutting measures and the increasing integration of artificial intelligence into business operations, which resulted in a spike in announced layoffs. Soni Kumari, a commodity strategist at ANZ, noted that the ongoing private job data supports the outlook for a likely rate cut in December, providing some support for gold prices.
The dollar’s retreat has also contributed to declines in major currencies, as investors reacted to the weak sentiment surrounding private-sector employment numbers in the absence of comprehensive government data. Typically, a strained job market points toward a higher likelihood of interest rate reductions; this sentiment has shifted market expectations to a 69% probability of a Fed rate cut in December, up from approximately 60% in the prior session. The Fed had recently implemented a rate cut, with Chair Jerome Powell indicating that further reductions might not occur for the remainder of the year.
Attention remains focused on macroeconomic indicators and the resolution of the ongoing government shutdown, both of which play pivotal roles in influencing safe-haven demand for gold, according to Kumari. This situation follows a prolonged congressional stalemate that has resulted in the longest government shutdown in U.S. history, compelling investors and the data-dependent Fed to rely more heavily on private sector metrics.
In the broader precious metals market, spot silver saw a 0.7% increase, priced at $48.31 per ounce, although it is on track for a weekly loss of 0.7%. Platinum experienced a decline of 0.4% to $1,534.21, marking a nearly 2% decrease for the week. Conversely, palladium recorded a slight gain of 0.3%, reaching $1,379.33 and heading toward a weekly increase of 0.5%.
