Gold and Silver Gain to End Volatile Trading Week

 

Gold and Silver Gain to End Volatile Trading Week

(Bullion News Network) – Gold and silver prices gained on Friday to cap a historic week of volatility. The spot price of gold added over $190 per troy ounce, settling within $25 of the $5,000/ozt level. Silver’s spot price gained more than $7.35/ozt but failed to recoup Thursday’s losses. The precious metal is now down nearly $38 per ounce compared to its all-time high from last Wednesday. The price action heavily favored silver, driving the gold-silver ratio down 3.44 points to approximately 63.77:1. This week saw large daily price swings across the precious metals market, with both gold and silver oscillating between wins and losses.

On Thursday, more troubling U.S. labor data caused Wall Street to sink. Initial jobless claims climbed from 212,000 to 231,000, a difference of 19,000. Job openings declined, falling from 7.1 million in November to only 6.5 million in December. Rate cut expectations jumped on the poor labor data, as a cooling U.S. job market may motivate the Fed to cut interest rates when it meets next in March. CME FedWatch’s projected probability of a March rate cut jumped from 13.4% on Jan. 30 to 23.2% on Thursday. The projection pulled back on Friday, settling at 19.9% by the end of the week. Federal Reserve officials have suggested that the FOMC is likely to take a “wait and see” approach ahead of its March meeting, with committee members paying especially close attention to inflation figures and the U.S. employment situation. Notably, gold and silver dipped dramatically on Thursday, despite the fact that heightened rate cut odds tend to be a bullish signal for safe haven assets like precious metals.

Platinum group metals also saw a largely volatile week. The spot price of platinum opened Monday with a loss before gaining on Tuesday and Wednesday to peak at $2,238.65/ozt. Thursday saw the metal shed nearly $250 per troy ounce. On Friday, the spot price of platinum gained over $114/ozt to close above the $2,100 line. Palladium gained on Monday, Tuesday, and Wednesday before retreating on Thursday by just under $115 per troy ounce. The spot price of palladium increased by $53.60 by market close on Friday, falling short of Wednesday’s peak by approximately $42/ozt. 

Next week will feature a range of important data reports and remarks from leading U.S. economic speakers. Atlanta Fed President Raphael Bostic will speak on Monday, followed by Fed governors Christopher Waller and Stephen Miran. Cleveland Fed President Beth Hammack will speak on Tuesday, along with Dallas Fed President Lorie Logan. Kansas City Fed President Jeff Schmid will speak on Wednesday, followed by another speech from Fed Governor Stephen Miran on Thursday.

The headlining report for next week will be the U.S. employment report, which will cover jobs data for the month of January. Employment numbers are expected to remain key to the FOMC’s decision-making as it prepares for the March meeting. 2025’s three consecutive rate cuts to end the year occurred after a series of cooling labor market reports, so the odds of a rate cut in March hinge largely on how the U.S. jobs market is performing. On Friday, the January Consumer Price Index (CPI) will be published. This report should also be a major moment for the Fed rate cut futures market. Given what we’ve heard from Fed officials throughout January, FOMC voters are looking to see that inflation is under control and the labor market continues to cool before they are likely to cut interest rates again.

Also looming on the Federal Reserve front is Kevin Warsh’s nomination as the next Fed Chair. Trump announced Warsh as his pick to succeed Jerome Powell last Friday, a decision that drove gold and silver to their largest daily losses in years. Warsh’s reputation on Wall Street suggests that he will be unlikely to advocate for large asset acquisitions by the Central Bank, and some analysts believe he may be willing to resist President Trump’s pressure to drastically cut interest rates.

Warsh’s confirmation to the position is far from guaranteed, though. On Wednesday, GOP Senator Thom Tillis doubled down once more on his promise to block Warsh’s confirmation unless the Department of Justice resolves its controversial investigation into the current Fed Chair, Jerome Powell. According to Senate Republicans, Tillis has the votes to block the confirmation from escaping committee.

Aside from the economic reports noted above, traders next week will likely pay close attention to Tillis as he and the White House trade remarks concerning Warsh’s upcoming confirmation process. As always, controversy and uncertainty tend to drive demand for safe haven assets like gold and silver. That being said, this historic week of volatility in both markets means that nearly anything could be possible.

Gold and silver both gained to end the week, although the precious metals remain far below their all-time highs set last Wednesday.