Gold futures surged on Friday, December 6th, buoyed by a U.S. jobs report that signaled a gradual cooling of the labor market. This growth is expected to encourage the Federal Reserve to further reduce interest rates.
The COMEX gold contract for February delivery climbed $11.20, or 0.42%, to settle at $2,659.60 per ounce.
While U.S. employment figures for November showed a significant increase,analysts noted that the growth wasn’t drastic enough to suggest a sudden shift in the slowing labor market trend.This scenario supports market expectations for another interest rate cut by the Federal Reserve this month.
“the employment numbers were strong, but not strong enough to change the Fed’s trajectory,” said one market analyst. “They’re still on track for a rate cut in december.”
Gold prices also received a boost from a weakening U.S.dollar and declining U.S. government bond yields. The U.S. Department of Labor reported that non-farm payrolls increased by 227,000 jobs in November, exceeding analysts’ forecasts of 202,000 jobs. this followed a meager gain of 36,000 jobs in October, which was attributed to the impact of Hurricanes Helene and Milton and a strike by Boeing employees.
The unemployment rate ticked up to 4.2%, in line wiht analysts’ expectations, from 4.1% in October.
The trend of interest rate reductions, which began with a 0.50% cut in September, has been a key driver of gold’s impressive performance this year. Lower interest rates make gold, a non-interest-bearing asset, more appealing to investors.
Market participants now anticipate an 87% probability that the Federal Reserve will implement a 0.25% interest rate cut at its meeting this month, up from a 72% chance before the release of the employment data.
By Kanlayanee Chewapanich
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