Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold surged 2.8% to close above $1,676 after a mixed US jobs report and softer Fed talk caused the dollar to tumble, boosting alternative stores of value. The metal ended the week with a gain of 1.9%. Silver rocketed 6.9% higher to $20.78, notching a weekly win of 8.5%.

The US economy added 261,000 new jobs in October, beating expectations. Although it was the smallest increase in nearly two years, the total was solid, suggesting that the labor market remains hot despite the Fed's efforts to cool it down via jumbo rate hikes.

Beneath the strong headline jobs number, however, the details told a somewhat different story. The unemployment rate rose from 3.5% to 3.7%, signaling some loosening of labor market conditions. And wage inflation slowed to 4.7% from 5% the previous month, a sign that pricing pressure is coming down.

Separately, the Labor Department's Employment Cost Index showed nongovernment wage growth slowed dramatically in the third quarter, dropping from 1.6% and 1.2%. The Fed views the ECI as a reliable indicator of slack in the labor market and predictor of future core inflation.

The Fed is trying to thread a needle, smothering rampant inflation by slowing the economy without tipping it into recession. Today's data on rising unemployment and falling wage growth suggest their aggressive actions are finally bearing fruit.

Several Fed members today said as much, indicating it might be time to slow their rate-hike roll. Richmond Fed President Thomas Barkin said he's ready to act more "deliberately." Boston Fed President Susan Collins said "smaller increments" may decrease "risks of overtightening," a position endorsed separately by Chicago Fed President Charles Evans.

The dollar plunged 1.9% against major rivals as traders, responding to the Fed talk and jobs data, embraced the thought of slower future rate hikes. A weaker dollar lifts gold and other commodities by making them less expensive in other currencies.

Also buoying gold, US benchmark WTI crude jumped 5% to more than $92 per barrel after China said it may lift draconian Covid curbs and reopen its economy, lifting demand for oil. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The PMGs were higher for the day but mixed for the week. Platinum picked up 3.9% for a weekly rise of 1.2%; palladium rose 2.3% but still lost 3% this week.

At the Comex close: December gold surged $45.70 to $1,676.60; December silver jumped $1.35 to $20.78; January platinum prices picked up $36.40 to $960.50; and December palladium rose $41.40 to $1,839.50 an ounce.