Gold futures concluded on a positive note on Friday, September 1st, as market sentiment leaned towards the Federal Reserve (Fed) delaying any interest rate hikes in its upcoming meetings. This optimism followed the release of a Labor Department report, which highlighted sluggish nonfarm payrolls and a simultaneous increase in unemployment.
Gold futures experienced an uptick of $1.20, translating to a 0.06% increase, with the precious metal closing at $1,967.10 per ounce. Over the course of the week, gold prices recorded a 1.4% increase. However, it’s worth noting that gold prices dipped by over 2% during the month of August.
Meanwhile, silver futures faced a setback, declining by 25.00 cents or 1.01%, settling at $24.562 per ounce. Platinum futures also experienced a decline, shedding $5.70 or 0.58%, with a closing price of $968.70 per ounce. Palladium futures, on the other hand, saw a rise of $8.70, equivalent to a 0.70% increase, closing at $1,227.40 per ounce.
The boost in gold contracts came in response to the US Department of Labor’s report, which revealed that nonfarm payrolls grew by 187,000 in August. This figure exceeded analysts’ expectations, with forecasts initially standing at 170,000 jobs. However, the report also indicated an increase in the unemployment rate to 3.8%, marking the highest level since February 2022, and surpassing the projected rate of 3.5%.
Furthermore, the report revealed that workers’ average hourly wages had increased by 4.3% year-on-year for the month of August. While this growth rate fell slightly short of analysts’ projections of 4.4%, it remained a noteworthy indicator. On a month-on-month basis, average hourly wages for workers increased by 0.2%, slightly below the expected 0.3%.
Market sentiment appeared to place significant emphasis on the belief that the Federal Reserve would maintain its current interest rates during its upcoming meeting later this month, prompted by the nonfarm employment report’s findings.
According to the latest data from CME Group’s FedWatch Tool, investors are currently assigning a 93.0% probability to the likelihood that the Fed will keep interest rates steady within the range of 5.25% to 5.50% at its September 19-20 meeting. A smaller 7.0% probability is attributed to the possibility of a 0.25% rate hike, which would move the range to 5.50% to 5.75%.
Furthermore, the FedWatch Tool also indicates that investors are anticipating the Fed to maintain interest rates within the 5.25% to 5.50% range for its November and December meetings, reflecting a degree of stability in the economic outlook.
As investors continue to closely monitor economic indicators and Fed announcements, the gold market remains sensitive to shifts in monetary policy and economic conditions, with gold prices responding accordingly to the evolving expectations.
The Spot Market is Closed
Saturday, September 2, 2023