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Fed Rate Cut Odds Plunge, Gold Takes a Hit

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Gold prices dropped Thursday as traders scaled back bets on a December Fed rate cut following today’s jobs report release.

Price Action:

  • Comex Gold (Nov): Down $21.20 (-0.52%) to $4,056.50/oz
  • Comex Silver (Nov): Down 54.30¢ (-1.07%) to $50.247/oz

What Happened: The U.S. added 119,000 jobs in September—well above the 50,000 expected—marking the biggest monthly gain in five months. This stronger-than-anticipated labor data made investors rethink whether the Fed will ease in December.

The Catch: While job growth looked solid, unemployment ticked up to 4.4% from 4.3%, and wage growth stayed flat at 3.8%. This mixed signal created confusion in markets.

Fed’s Stance: The latest FOMC minutes showed sharp disagreement among officials. Chair Powell has been crystal clear: a December cut is “not a foregone conclusion.” CME FedWatch now pegs the odds of a 25bp cut at just 39.4%.

Why It Matters: Gold thrives in low-rate environments. If rate cuts are off the table, the appeal dims. Traders are now pricing in a “higher for longer” scenario, which pressures precious metals but supports the dollar.

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