Gold advanced as traders sought safety in the precious metal amid concerns over tariffs and inflation, even as a strong US jobs report supported the case for a pause in Federal Reserve interest-rate cuts.
US hiring accelerated in December and the unemployment rate unexpectedly fell, capping another year of resilience in the jobs market, a Bureau of Labor Statistics report showed Friday. The print reaffirmed policymakers’ view that the US central bank will adopt a more cautious approach to lower borrowing costs amid a still-healthy labour market and sticky inflation.
Swap traders have now shifted their expectations for the Fed’s next rate cut to the second half of the year, and 30-year Treasury yield rose above 5% for the first time for the first time in more than a year.
While higher rates typically are a headwind for bullion as it pays no interest, gold traders continue to pile into the precious metal as they focused on other factors such as risks from potential tariffs by President-elect Donald Trump, stubborn inflation and rising US debt load.
Gold and silver’s resilience is “impressive considering the stronger dollar and rising bond yields,” said Ole Hansen, head of commodities strategy at Saxo Bank. It highlights that the metals are “driven by other factors including trade wars, inflation worries, and fiscal debt worries.”
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Spot gold slipped as much as 0.1% after the data release. The price was 0.1% higher at US$2,670.84 ($3,662.94) an ounce as of 8.39am in New York. As of 9.36am in New York, spot gold rose 0.9% to US$2,691.05 an ounce. Silver, platinum and palladium advanced.
