Gold and silver advanced Friday, with the white metal on track to finish the session at its highest price in about a month, as the U.S. dollar pulled back in the wake of the October jobs report.
- Gold prices for December GCZ22, +2.77% delivery gained $35.80, or 2.2%, to $1,666.70 per ounce, trading more than 1% higher for the week.
- Silver prices for December SIZ22, +6.18% delivery advanced 98 cents, or 5%, to $20.41 per ounce, the highest level for a most-active contract since Oct. 6, FactSet data show. Silver prices were up over 6% for the week.
- Palladium prices for December PAZ22, +5.58% delivery gained $97.40, or 5.4%, to $1,895.50 per ounce while platinum prices PLF23, +3.83% for January delivery advanced $25.90, or 2.8%, to $950 per ounce.
- Copper prices for December HGZ22, +7.03% delivery gained 21.4 cents, or 6.2%, to $3.641 per pound.
The U.S. economy gained a surprisingly strong 261,000 new jobs in October, the government said Friday. Economists polled by The Wall Street Journal had forecast 205,000 new jobs. Still, the increase in hiring was the smallest since April 2021.
Following the data, the ICE U.S. Dollar index DXY, -1.62% fell by 0.9% to 111.887, helping to provide support for dollar-denominated precious metals. Treasury yields, however, edged higher. Higher Treasury yields can spell weakness for gold, which like other commodities offers no yield.
Gold prices added to their overnight gains after the release of the report, “as analysis are saying this is a Goldilocks report that is ‘not too hot and not too cold’,” said Jim Wyckoff, senior analyst at Kitco.com, in market commentary.
That means “it is not too strong to prompt the Federal Reserve to become more aggressive in tightening its monetary policy, nor is it too weak to cause more concern about a U.S. economic recession,” said Wyckoff.
Even so, Jeff Wright, chief investment officer at Wolfpack Capital, told MarketWatch, that the bias for gold is “to the downside [versus] the upside on any meaningful directional move.”
Gold has been range bound in the $1,600s for awhile, he said. “I do not see a compelling case to allocate more capital to gold at the present time nor a situation to liquidate either,” said Wright.
The market is anticipating a lower pace of interest rate increases, with December probably at 50 basis points, he said. The Fed has “made the case inflation must be contained even if the trade off is a weaker employment market.”
The central bank approved the fourth straight jumbo increase in a key U.S. interest rate — 0.75 percentage points to a range of 3.75% to 4% — on Wednesday and signaled rates are likely to go higher than previously forecast.
On Friday, Boston Fed President Susan Collins said “it is premature to signal how high rates should go.”