Gold rises 0.8% above $4,100 as markets await US inflation data
Key Facts
Spot gold rose 0.8% to $4,104.30 an ounce at 8:02 p.m. Eastern Time on Monday, November 9, according to Investing.com data, recovering above the $4,100 level. The rebound followed a decline in the metal on Friday after the US jobs report, while the dollar index fell 0.1% to 102.22 points at the same time. Investors are now turning to October consumer price data, due Tuesday, to assess the path of inflation and monetary policy. The jobs report showed that 165,000 nonfarm jobs were added in October, an increase that exceeded market expectations of 65,000 jobs. The Bureau of Labor Statistics said the unemployment rate “changed little” at 4.1%, signaling that the measure was stable rather than falling.
Spot gold fell 0.3% to $4,074.36 an ounce on Friday after dropping more than 1% during the session to a low of $4,033.29, according to Reuters via MarketScreener. The metal nevertheless remained up 5.2% for the week ended November 6, weekly gains that came alongside pressure on prices from jobs data in the final session. In currency markets, the dollar index jumped 0.77% to 102.26 points after the report was released. The yield on 10-year US Treasuries also rose 1.6 basis points to 4.85%, while the two-year yield climbed 4.1 basis points to 4.52%. The dollar and yield gains coincided with renewed pricing of the possibility of a rate increase, moves that underscore markets’ response to the jobs report before gold rebounded on Monday.
On monetary policy expectations, traders’ estimates of the probability that the Federal Reserve would raise interest rates in December rose to 81% after the jobs report, from 72.8% beforehand, according to CME Group’s FedWatch tool, as reported by Reuters. These figures reflect a change in market pricing after the jobs reading and do not, on their own, establish what the committee will decide at its next meeting. The actual increase in jobs exceeded EL7’s forecast of 65,000, with the reading at 165,000 on November 6. The Bureau of Labor Statistics said unemployment remained at 4.1%, with little change, and described the number of unemployed people as little changed at 7.1 million in October. The unemployment rate has remained within a narrow range of 4.1% to 4.3% since March, the bureau said, placing October’s reading in the context of relative stability in the measure over recent months.
Employment growth came from several sectors, with the Bureau of Labor Statistics saying jobs increased in professional and business services, health care, transportation and warehousing. Health care added 42,000 jobs in October, above the average monthly gain of 31,000 over the previous twelve months. The professional and business services sector added 70,000 jobs during the month, according to the report. In addition to October’s gains, Labor Department revisions added a total of 84,000 jobs to the August and September totals, according to the Associated Press. The details indicate that the positive surprise was not limited to a single headline figure, but was accompanied by gains across several sectors and upward revisions for previous months.
Markets are awaiting publication of the US October Consumer Price Index on November 10 at 8:30 a.m., according to the Bureau of Labor Statistics’ schedule. On the same day, Federal Reserve Governor Christopher Waller will deliver a speech titled “Economic Outlook” at the Bank of England and Central Bank Watchers Conference in London, according to the Fed’s schedule. The events follow a jobs report that lifted traders’ pricing of a possible December rate increase, while the inflation report will provide a new indicator alongside employment data. The Federal Reserve’s next monetary policy meeting is scheduled for December 8 and 9. The November Employment Situation report is scheduled for release on December 4, ahead of that meeting.