Jobs report dulls gold as the data released this morning shows U.S. jobs growth slowed less than expected in October and China’s factory activity expanded at its fastest pace in more than two years.
The non-farm payrolls data released by the Labor Department showed jobs growth in October came in at 128,000. Economists polled by Reuters had predicted just 89,000 jobs. However, growth still slowed from September.
Bullion advanced 0.6% in the first four days of this week. The most-active December contract increased 1.2% Thursday to settle at $1514.80 an ounce on Comex, the highest settlement price since Sept. 26. It gained 2.8% in October. Currently, the December contract is at $1,510.90.
Host Chile decided to cancel the Nov. 16-17 Asia-Pacific Economic Cooperation summit at which the two superpowers were aiming to sign an interim deal, and Chinese officials are casting doubts about whether a long-term trade agreement is possible, even if a phase-one accord goes forward, Bloomberg reported. Precious metals soared this year on the countries’ trade standoff.
Manufacturing activity in China beat estimates for October, a private survey showed early Friday. The Caixin/Markit PMI data came in at 51.7, while analysts polled by Reuters had forecast a level of 51.0 versus 51.4 in September. Numbers above 50 indicate expansion, while those below indicate a contraction. New orders rose at the fastest pace since the trade war began.
Investors are looking to economic reports to evaluate whether the Federal Reserve will continue to cut interest rates. Two key monthly U.S. economic reports for October are due out on Friday — industrial production and the jobs report. The manufacturing survey showed the worst reading in a decade in September. And the jobs report is expected to show that payrolls slid to a five-month low last month, according to Bloomberg.
The U.S. central bank reduced rates by 25 basis points for a third consecutive time on Wednesday. The CME FedWatch Tool showed just a 12.5% probability of another cut at the Federal Open Market Committee’s next meeting Dec. 11, while 87.5% predicted no change early Friday. The figures have shifted from a week earlier, when 67.6% predicted no change, 27.5% anticipated another cut and 4.9% forecast an increase.
The Bank of Japan left interest rates unchanged at a monetary policy meeting Thursday but hinted that further rate cuts are possible.
In addition to the trade talks and the economy, investors are still closely watching the latest efforts to impeach U.S. President Donald Trump and the leadup to Britain’s departure from the U.K. The U.S. House of Representatives backed an impeachment probe Thursday in a near-party-line vote, clearing the way for nationally televised hearings, the Washington Post reported.
Silver increased 0.8% in the first four days of this week, with the most-active December contract rallying 1.1% to $18.07 an ounce Thursday on Comex. It gained 6.3% in October.
Spot palladium fell Thursday but advanced 7.3% in October. Spot platinum rose Thursday and was up 5.6% last month.