Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.3% to close above $1,999 as more evidence of a cooling economy reinforced expectations that the Fed is finished raising interest rates, undercutting yields and the dollar while lifting alternative assets. The metal ended the week less than 0.1% higher for its fourth consecutive weekly win.

The government’s nonfarm payrolls report showed a meager 150,000 jobs were added in October, well under forecasts of 180,000, and totals for September were revised down to 297,000 from initial reports of 336,000. The unemployment rate rose to 3.9%, the highest level in nearly two years.

In addition to the slacker demand for labor, wage growth slowed to 4.1% from a year earlier, the smallest rise since June 2021. Wage growth is a key factor in inflation.

Separately, the ISM reported its US services gauge softened to a five-month low of 51.8%, where anything under 50% signals contraction. Including industries like restaurants, retailing, hospitality, and finance, the services sector makes up more than 70% of GDP.

Benchmark 10-year Treasury yields retreated to just above 4.5% as the weaker jobs and ISM data all but cemented expectations that the Fed is finished raising interest rates. For the week, yields fell 30 basis points for the biggest drop in nearly a year. Falling yields support gold by decreasing the opportunity cost for holding it instead of bonds.

The dollar tracked lower with yields, dropping 1% to a six-week low against major rivals. A weaker dollar buoys gold and other commodities by making them less expensive in other currencies.

Gold’s gains were capped by surging risk appetite. The Dow and S&P 500 added 0.8% and 1.1%, respectively, while the rate-sensitive Nasdaq jumped 1.5%.

The other precious metals were higher for the day and mixed for the week. Silver jumped 1.9% for a weekly rise of 1.7%. Platinum rose 1.5% today and 4.3% this week. Palladium added 1.6% but still lost 0.2% for the week.

At the Comex close: December gold gained $5.70 to $1,999.20; December silver jumped 44 cents to $23.29; January platinum rose $13.70 to $944.30; and December palladium picked up $17.70 to $1,128.30 an ounce.