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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Fed Rate Cut Odds Plunge, Gold Takes a Hit
Gold prices dropped Thursday as traders scaled back bets on a December Fed rate cut following today’s jobs report release.
Price Action:
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.