Gold futures reignited this year’s meteoric ascent as investors bet that the Federal Reserve will cut interest rates at the December Federal Open Market Committee (FOMC) policy meeting. The yellow metal has been struggling since touching record levels, but weak data might be the fresh catalyst for gold prices.
December gold futures advanced $106.40, or 2.65%, to $4,116.20 per ounce at 18:13 GMT on Monday on the COMEX division of the New York Mercantile Exchange. Gold prices were little changed last week and remain up 56% year-to-date.
Silver, the sister commodity to gold, returned above $50 to kick off the trading week. January silver futures spiked $2.202, or 4.57%, to $50.345 per ounce. The white metal climbed 0.5% last week, adding to this year’s 72% gain.
The metals market surged on Monday as weak economic data reignited expectations that the US central bank will implement three consecutive interest rate cuts in December.
Various alternative measurements last week indicated that the US labor market may have weakened in October.
Data from workforce analytics company Revelio Labs showed 9,100 jobs were lost in October.
The Chicago Fed’s biweekly Labor Market Indicators report suggested the unemployment rate ticked up slightly to 4.4%.
Additionally, global outplacement firm Challenger, Gray and Christmas showed planned job cuts soared 183% to 153,074 in October, the highest for the month in more than two decades.
“Some industries are correcting after the hiring boom of the pandemic, but this comes as AI adoption, softening consumer and corporate spending, and rising costs drive belt-tightening and hiring freezes,” said Andy Challenger, the firm’s chief revenue officer, in a statement. “Those laid-off now are finding it harder to quickly secure new roles, which could further loosen the labor market.”
This has investors expecting a 70% chance of a rate cut at next month’s two-day FOMC meeting.
Fed Chair Jerome Powell had indicated that a third straight rate cut was not guaranteed, warning that without government data, it is hard to gauge the economy’s health.
Gold prices are sensitive to interest rates since they can influence the opportunity cost of holding non-yielding bullion.
Senate Republicans and Democrats could be nearing a deal to reopen the government.
“A reopening would restore data flow and revive expectations for a December rate cut, but more importantly it shifts market focus back to the deteriorating U.S. fiscal outlook,” Ole Hansen, head of commodity strategy at Saxo Bank, said in a note.
In other metal markets, December copper futures soared $0.133, or 2.68%, to $5.09 per pound. December platinum futures advanced $52.30, or 3.38%, to $1,601.40 an ounce. December palladium futures rocketed $43.80, or 3.12%, to $1,447.00 an ounce.