Gold Prices Dip Amid Strengthened Rate Cut Expectations Following US Labor Data
Gold prices saw a minor decrease on December 4, as US labor market data heightened expectations for a Federal Reserve rate cut in the upcoming week. In contrast, silver continued its upward trend, reaching a new record high.
This decline followed ADP data released on Wednesday, which indicated that the private non-farm sector in the US lost 32,000 jobs in November, a stark contrast to analyst predictions of a 5,000 job increase. The chief market strategist at RJO Futures commented on the situation, stating in a Reuters report: "The disappointing labor market data and the rise in silver prices to an all-time high support the gold price."
The CME market forecast tool indicated that the likelihood of a Federal Reserve rate cut at next week's meeting has risen to about 89%, reflecting strong market sentiment towards this scenario. Markets are currently anticipating the release of the US Personal Consumption Expenditures (PCE) price index for September, set to be published on Friday, which is the Federal Reserve's preferred measure of inflation.
In a separate context, silver prices continued their remarkable ascent, having risen approximately 102% since the beginning of the year, driven by growing concerns over market liquidity following significant outflows into US equities.
In terms of direct pricing, November gold futures fell by about 0.2% to $4,226.10 per ounce, while the spot price for gold also decreased by 0.2% to $4,195.70 per ounce. Conversely, silver futures rose by 0.3% to $58.78 per ounce.
It is important to note that precious metals are directly influenced by US monetary policy decisions, as lower interest rates tend to support non-yielding assets like gold, increasing their appeal during times when monetary easing is anticipated.
