Gold Prices Slide Following Strong US Employment Data
Gold markets experienced significant pressure on Thursday as investors reacted to a surprisingly robust U.S. jobs report that diminished hopes for an interest rate cut in December. The precious metal, which had been trading near recent highs, retreated as the strong economic indicators strengthened the U.S. dollar and reduced the appeal of non-yielding assets.
Market Reaction and Price Movement
Spot gold declined by 0.6% to $4,058.29 per ounce by 1:45 p.m. ET, mirroring the drop in U.S. gold futures for December delivery, which also settled 0.6% lower at $4,060 per ounce. The simultaneous strengthening of the U.S. dollar against most major currencies made dollar-priced gold more expensive for international buyers, adding another layer of pressure to the precious metal's valuation.
The delayed Labor Department report, which was postponed due to the recent government shutdown, revealed that September nonfarm payrolls increased by 119,000—more than double the estimated 50,000 gain. This stronger-than-expected performance essentially confirmed what Federal Reserve officials had discussed in October: a slowing yet stable jobs market.
Expert Analysis and Future Outlook
Peter Grant, vice president and senior metals strategist at Zaner Metals, commented that 'a December rate cut now appears increasingly unlikely,' which directly contributed to the selling pressure on gold. Traders currently price nearly a 40% chance for a rate cut next month, reflecting the shifted expectations following the jobs data release.
Meanwhile, minutes from the Fed's October meeting revealed that policymakers had lowered interest rates despite warning that such moves could heighten inflation risks and undermine public confidence in the central bank. Due to the government shutdown, the Bureau of Labor Statistics has canceled the release of the October jobs report and will combine it with November's figures, with the combined report scheduled for release on December 16—after the Fed's next meeting.
Despite recent consolidation, UBS raised its 2026 mid-year gold target price by $300 to $4,500 per ounce, citing expectations of eventual U.S. rate cuts, persistent geopolitical risks, and strong central bank and exchange-traded fund demand. Gold, traditionally considered a safe-haven asset, has risen 55% this year, hitting a record high of $4,381.22 on October 20.
Among other precious metals, spot silver fell 1.7% to $50.47 per ounce, platinum dropped 2.3% to $1,510.70, and palladium edged down 0.1% to $1,379.
