Gold Prices Slip as Fed Rate Cut Hopes Wobble Amid Strong U.S. Jobs Data
Highlights:
Gold prices slipped early last week as traders questioned the likelihood of a Federal Reserve rate cut, following stronger-than-expected U.S. jobs data and uncertainty from the U.S. government shutdown.
Spot gold traded at US$4,065.27 an ounce at the time of writing, recovering slightly after comments from New York Fed President John Williams suggested there may still be room for rate adjustments.
The uncertainty weighed on the broader metals market, with base metals finishing the week lower, although copper losses were limited by tight physical supply conditions.
Pressure Mounts on Bullion
The price of gold softened last week as markets increasingly questioned if the Federal Reserve would cut interest rates at its next meeting. According to an analysis from ANZ Group, stronger-than-expected U.S. employment figures for September and delays in broader economic releases due to the U.S. government shutdown added to investor caution. At the time of writing, spot gold is trading near US$4,065.27 an ounce, signalling a pause in its recent run-up.
Tightening Labour Market Clouds Outlook
Markets had hoped that weakening labour market conditions would prompt the Fed to ease policy; instead, robust job growth stirred doubts. The ANZ commentary highlighted that without clear signs of softness in employment, expectations for near-term rate cuts may be premature. The muddled data from the federal shutdown only deepened uncertainty, reducing the clarity of Fed signals and leaving gold vulnerable to risk-off moves.
Markets Shift as Fed Signals Flexibility
Despite the headwinds, sentiment improved somewhat when John C. Williams, President of the Federal Reserve Bank of New York, said there may be “room for a further adjustment” in the near-term to the target rate, pointing to rising downside risks in employment and easing upside inflation risks. That comment helped bullion pare earlier losses and reminded markets that a rate-cut path isn’t off the table.
At the time of writing, the broader metals complex mirrored gold’s caution — with base metals also ending the week in the red amid risk-off sentiment. ANZ noted that global macro uncertainty and weaker rate-cut expectations pulled the whole commodities complex lower, even as tightness in the physical copper market provided some support.
What to Watch
Going forward, investors will monitor U.S. non-farm payrolls, inflation data and how the Fed frames its policy outlook. A clear tilt back to a dovish stance could resuscitate gold’s momentum, but if the labour market remains strong and inflation sticky, gold may struggle to hold its gains.
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Gold Prices Slip as Fed Rate Cut Hopes Wobble Amid Strong U.S. Jobs Data
Highlights:
Pressure Mounts on Bullion
The price of gold softened last week as markets increasingly questioned if the Federal Reserve would cut interest rates at its next meeting. According to an analysis from ANZ Group, stronger-than-expected U.S. employment figures for September and delays in broader economic releases due to the U.S. government shutdown added to investor caution. At the time of writing, spot gold is trading near US$4,065.27 an ounce, signalling a pause in its recent run-up.
Tightening Labour Market Clouds Outlook
Markets had hoped that weakening labour market conditions would prompt the Fed to ease policy; instead, robust job growth stirred doubts. The ANZ commentary highlighted that without clear signs of softness in employment, expectations for near-term rate cuts may be premature. The muddled data from the federal shutdown only deepened uncertainty, reducing the clarity of Fed signals and leaving gold vulnerable to risk-off moves.
Markets Shift as Fed Signals Flexibility
Despite the headwinds, sentiment improved somewhat when John C. Williams, President of the Federal Reserve Bank of New York, said there may be “room for a further adjustment” in the near-term to the target rate, pointing to rising downside risks in employment and easing upside inflation risks. That comment helped bullion pare earlier losses and reminded markets that a rate-cut path isn’t off the table.
At the time of writing, the broader metals complex mirrored gold’s caution — with base metals also ending the week in the red amid risk-off sentiment. ANZ noted that global macro uncertainty and weaker rate-cut expectations pulled the whole commodities complex lower, even as tightness in the physical copper market provided some support.
What to Watch
Going forward, investors will monitor U.S. non-farm payrolls, inflation data and how the Fed frames its policy outlook. A clear tilt back to a dovish stance could resuscitate gold’s momentum, but if the labour market remains strong and inflation sticky, gold may struggle to hold its gains.
Disclaimer for Kapitales Research
The materials provided by Kapitales Research, including articles, news, data, reports, opinions, images, charts, and videos ("Content"), are intended for personal, non-commercial use only. The primary goal of this Content is to educate and inform readers. This Content is not meant to offer financial advice, nor does it include any recommendation or opinion that should be relied upon for making financial decisions. Certain Content on this platform may be sponsored or unsponsored, but it does not serve as a solicitation or endorsement to buy, sell, or hold any securities, nor does it encourage any specific investment activities. Kapitales Research is not authorized to provide investment advice, and we strongly advise users to seek guidance from a qualified financial professional, such as a financial advisor or stockbroker, before making any investment choices. Kapitales Research disclaims all liability for any direct, indirect, incidental, or consequential damages arising from the use of the Content, which is provided without any warranties. The opinions expressed by contributors or guests are their own and do not necessarily reflect the views of Kapitales Research. Media such as images or music used on this platform are either owned by Kapitales Research, sourced through paid subscriptions, or believed to be in the public domain. We have made reasonable efforts to credit sources where appropriate. Kapitales Research does not claim ownership of any third-party media unless explicitly stated otherwise.
Customer Notice:
Nextgen Global Services Pty Ltd trading as Kapitales Research (ABN 89 652 632 561) is a Corporate Authorised Representative (CAR No. 1293674) of Enva Australia Pty Ltd (AFSL 424494). The information contained in this website is general information only. Any advice is general advice only. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk, and you must undertake your own investigations and obtain your own advice regarding the suitability of this product for your circumstances. Please be aware that all trading activity is subject to both profit & loss and may not be suitable for you. The past performance of this product is not and should not be taken as an indication of future performance.
Kapitales Research, Level 13, Suite 1A, 465 Victoria Ave, Chatswood, NSW 2067, Australia | 1800 005 780 | info@kapitales.com.au.au