Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold edged slightly lower, dipping 0.1% to close under $1,252, as subpar U.S. jobs data failed to dissuade traders that the Fed is on track for a December rate hike. The metal finished the week 5% lower for its biggest weekly drop since 2013.

U.S. nonfarm payrolls added 156,000 jobs in September, fewer than forecast and well-under August's disappointing total of 167,000. It was the third straight month of diminhing job growth, in line with slow growth in GDP. The unemployment rate ticked up to 5% as more workers entered the labor force.

While certainly not robust, the jobs report was widely seen as good enough to keep the Fed on its seemingly predestined course for higher interest rates this year. CME Fedwatch raised the likelihood of a December hike to 70%, up from 64% yesterday.

Several Fed officials weighed in to promote the idea. Esther George of the Kansas City Fed, who supported a September hike, called the data encouraging; Cleveland Federal Reserve President Loretta Mester, another policy hawk, called the data consistent with higher rates; and Fed Vice Chair Stanley Fischer said the jobs report was "close" to ideal.

Gold plunged on Tuesday after what was believed to be a massive dump by a London-based hedge fund, driving prices through technical support at $1,300 and triggering stop-loss sales that sent the metal into freefall. After the sell-off, Goldman Sachs told clients that gold under $1,250 is "a strategic buying opportunity," with prices to be well-support by physical sales, ETFs, and renewed Chinese buying in coming months.

The other precious metals were mixed for the day but strongly lower for the week. Silver slid 0.2% today but plunged 9.6% this week. Platinum dropped 0.4% on the day and 7% on the week. Outlier palladium picked up 0.2% but still lost 7.5% this week.

At the Comex close: December gold dipped $1.10 to $1,251.90; December silver slid 4 cents, to $17.38; January platinum dropped $3.70 to $962.60; and December palladium picked up $1.25 to $667.40 an ounce.