Gold Prices Dip as Job Losses Raise Rate Cut Expectations
Gold prices dipped slightly on Thursday, December 4th, after U.S. labor market data indicated a loss of 32,000 jobs in November, which has strengthened expectations for the Federal Reserve to lower interest rates at its upcoming meeting. Meanwhile, silver prices continued to rise, reaching a new record high.
This decline in gold prices followed the release of the ADP report on Wednesday, which contradicted analysts' predictions of a 5,000 job increase. The chief market strategist at RJO Futures remarked, as reported by Reuters: "The disappointing job data and record silver prices provide support for gold prices."
According to the CME's market expectations tool, the probability of the Fed cutting interest rates at its next meeting has risen to approximately 89%. Investors are also awaiting the U.S. Personal Consumption Expenditures Price Index data for September, set to be released on Friday, which is the Fed's preferred inflation gauge.
In a separate development, silver prices have surged approximately 102% since the start of the year, driven by growing concerns over market liquidity amid significant outflows towards U.S. equities.
As for pricing specifics, November gold futures fell by about 0.2% to $4,226.10 per ounce, while the spot gold price also decreased by 0.2% to $4,195.70 per ounce. In contrast, silver futures rose by 0.3%, reaching $58.78 per ounce.
It is important to note that precious metals are significantly influenced by U.S. monetary policy trends, as lower interest rates enhance the attractiveness of non-yielding assets like gold, particularly during periods of anticipated monetary easing.
