Gold and Silver Higher on Worse-Than-Expected U.S. Jobs Data

 

Gold and Silver Higher on Worse-Than-Expected U.S. Jobs Data

(Bullion News Network) – The spot price of gold increased on Friday, with the precious metal adding more than $30 per troy ounce and nearing a new all-time high. Silver prices also surged, outpacing gold to add over $3.10 per troy ounce. The price action heavily favored silver, driving the gold-silver ratio 1.75 points lower to less than 56.5:1. Friday’s surge comes on the heels of a worse-than-expected U.S. employment report. The U.S. economy added only 50,000 jobs in December, a decrease from 64,000 in November and a drop of 23,000 jobs compared to the median forecast. The report was not all bad; the unemployment rate ticked down from 4.5% in November to 4.4% last month.

The American job market remains a key focus for investors heading into 2026. A series of troubling employment data releases in late 2025 led to three consecutive interest rate cuts by the Federal Reserve. These rate cuts drove heightened safe haven demand throughout the final three months of 2025, helping gold and silver set several new all-time highs to end the year. Following a contentious December meeting that secured another 25 bps cut, Federal Reserve Chairman Jerome Powell told reporters that the FOMC finds itself in a difficult position heading into 2026.

In the near term, risks to inflation are tilted to the upside and risks to employment to the downside—a challenging situation. There is no risk-free path for policy as we navigate this tension between our employment and inflation goals. […] But with downside risks to employment having risen in recent months, the balance of risks has shifted. Our framework calls for us to take a balanced approach in promoting both sides of our dual mandate.

Friday’s worse-than-expected U.S. employment report may not be enough to sway the Federal Reserve as it prepares for its January meeting, however. CME FedWatch lowered its projected probability of a January interest rate cut to just 5% on Friday, down from 11.1% on Thursday and 16.6% one week ago. Next week, traders will be able to review the newest Consumer Price Index (PCI). This report could give the FOMC more data to work with as its members consider how to approach monetary policy heading into its January meeting.

Wall Street also shrugged off Friday’s U.S. employment report. The S&P 500, Nasdaq, and Dow all ended the day higher, with the Dow and S&P 500 closing at record highs to conclude the first trading week of 2026. Precious metals moved in a similar direction, with gold logging its second consecutive gain and silver snapping a two-day losing streak to challenge $80/ozt. For both precious metals, geopolitical uncertainty surrounding the United States and Venezuela could remain a significant demand driver in the coming weeks.

Last weekend, the United States military launched a surprise operation to extract Venezuelan President Nicolás Maduro and his wife, both of whom are now facing a range of charges relating to drug and weapons trafficking in the United States. The move led to international controversy and drove the U.S. Senate to advance legislation that seeks to rein U.S. President Trump in during the evolving international crisis. According to President Trump, the United States plans to “indefinitely” control the sale of Venezuela’s vast crude oil reserves. Gold and silver climbed on the news as the abrupt escalation drove demand for safe haven assets.

Additionally, this week saw Trump revive his suggestions that the United States should seize Greenland, which is an autonomous territory belonging to NATO-member Denmark. Together, these geopolitical tensions remain constant demand drivers for safe haven assets, including gold and silver.

Platinum-group metals diverged on Friday. Platinum lost just over $11 per troy ounce, while palladium added more than $32/ozt to its spot price. The price action marginally reduced the platinum-palladium gap; platinum holds a lead of more than $420 per troy ounce. 

For precious metal traders, next week’s Consumer Price Index (CPI) will be the keynote economic report. This data could give investors more insight into the U.S. economic situation. A drastic reduction in the inflation rate could lead to a higher probability that the FOMC will vote to cut interest rates this January. Otherwise, interest rate speculation could begin to taper as Wall Street prices in a no-change call. Next week will also end with speeches from several Federal Reserve executives, including Fed Governor Michael Barr, Richmond Fed President Tom Barkin, Kansas City Fed President Jeff Schmid, and Federal Reserve Vice Chair Philip Jefferson.