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Gold futures fell Friday after briefly turning positive, after mixed U.S. jobs data raised doubts on the scale of potential interest rate cuts from the Federal Reserve later this month.
August non-farm payrolls rose by 142K following downward revisions to the previous two months, and the unemployment rate edged down to 4.2%, the Bureau of Labor Statistics reported, eventually pushing Treasury yields and the dollar lower while lifting gold as much as 0.5% before erasing gains.
In the late morning, Federal Reserve governor Christopher Waller indicated the Fed may begin a string of rate cuts this month with a 25 basis points cut, which along with the reaction to the August jobs report and uncertainty around the impending U.S. election left traders with a risk-off sentiment, Jonathan Rose of Genesis Gold Group said, according to Dow Jones.
“People are struggling and investors are spooked,” Rose wrote, adding that gold’s typical role as a safe haven investment supports continued upward momentum for prices over the long term.
Front-month Comex gold (XAUUSD:CUR) for September delivery finished Friday -0.7% to $2,493.50/oz, flat for the week, while September Comex silver (XAGUSD:CUR) settled -3.2% for the day and the week at $27.808/oz, the lowest since August 14.
ETFs: (NYSEARCA:GLD), (NYSEARCA:GDX), (GDXJ), (IAU), (NUGT), (PHYS), (GLDM), (AAAU), (SGOL), (BAR), (OUNZ), (SLV), (PSLV), (SIVR), (SIL), (SILJ)
Gold paper traders are debating whether the Fed will cut 50 or 25 bps at the September 18 meeting, and the metal is reacting, Citi’s North America head of commodities Aakash Doshi said, Reuters reported.
Traders currently see a 73% chance of a 25-bp cut and a 27% chance of a 50-bp cut, according to the CME FedWatch tool.
Insight on Gold Market Trends
The fluctuation in gold prices in response to U.S. economic data and Federal Reserve announcements highlights the sensitivity of the precious metal to macroeconomic factors. Gold’s status as a safe haven asset during times of uncertainty often leads to increased demand and price spikes, as seen in the recent market movements.
