Gold dips as strong US jobs data dampens hopes for December rate cut

Gold prices softened on Friday after a stronger US jobs report dimmed hopes of an interest rate cut at the Federal Reserve’s meeting next month. The yellow metal eased in early trade as investors weighed the possibility that borrowing costs in the world’s largest economy may stay higher for longer.

Spot gold slipped to around $4,072 an ounce in the Asian session. US gold futures for December delivery were slightly higher, but the overall mood in the market was cautious.

Analysts said the pullback was driven by a firmer dollar and growing uncertainty over the Fed’s next move. Brian Lan, managing director at GoldSilver Central, said investors were watching the currency closely.

According to him, traders have been debating whether the Fed will move towards lower rates or keep a more guarded stance as the year draws to a close. He added that many market participants are also expected to lock in profits before the holiday period, which may add to short term pressure on prices.

The dollar was set for its strongest weekly performance in more than a month, making gold more expensive for buyers who hold other currencies. That alone was enough to keep some investors on the sidelines.

The latest jobs report from the US Labour Department added to the shift in sentiment. The figures, delayed due to a recent government shutdown, showed that employers added 119000 jobs in September. The reading was more than double what analysts had predicted and was interpreted as a sign that the labour market remains resilient. With that, traders now see only a limited chance of a rate cut in December.

Gold usually benefits when interest rates fall because it does not generate a yield of its own. Lower rates often make non yielding assets more appealing. For now, though, the outlook remains mixed.

Minutes from the Fed’s October meeting, released earlier this week, indicated that policymakers went ahead with a rate cut but were worried it might slow progress on inflation. Chicago Fed President Austan Goolsbee also voiced concern about cutting rates too quickly, saying he was uneasy about moving too fast while inflation remains sticky.

Other precious metals saw a mixed trend. Silver slipped to 50.35 dollars an ounce, while platinum inched higher to 1521 dollars. Palladium was little changed at 1377 dollars.

Overall, the market remained cautious, with traders looking for clearer signals from the Fed before taking fresh positions in gold or other metals.

Gold price in Pakistan

Gold prices in Pakistan dropped on Thursday, following losses in international markets. Locally, the price of gold per tola fell by Rs5,000 to reach Rs426,562, while 10-gram gold dropped to Rs365,708, down Rs4,286, according to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA).

The decline came after a brief rally on Wednesday, when gold per tola had risen by Rs7,900 to Rs431,562 per tola.