Gold prices experienced a decline, approaching $4,040 per ounce, and are trending towards a weekly loss. This movement is primarily attributed to diminishing expectations of a Federal Reserve rate cut in December, influenced by the latest jobs report. The labor market data, while indicating some cooling, remains relatively stable, further contributing to the uncertainty surrounding the timing of potential rate adjustments.
- Gold prices slipped to around $4,040 per ounce.
- The movement reflects expectations of a December Federal Reserve rate cut waning.
- The September nonfarm payrolls rose by 119,000, exceeding the 50,000 forecast.
- The unemployment rate increased to 4.4%, the highest since October 2021, surpassing the expected 4.3%.
- Wage growth was slightly higher than anticipated, at 3.8%.
- The BLS will skip the October employment report and roll its data into the November release.
- Traders see only a 40% chance of a rate cut next month.
The observed market behavior suggests a sensitivity to economic indicators and their potential impact on monetary policy. The asset’s value appears to be inversely correlated with the perceived likelihood of interest rate cuts. Stronger-than-expected labor market data, alongside a slightly elevated wage growth, diminishes the urgency for the central bank to ease monetary policy, thereby reducing the attractiveness of this particular asset, which tends to perform better in lower interest rate environments.