Gold, Silver Climb As Stock Market Pulls Back On New Jobs Data

 

Stocks Slide, Metals Gain On Strong Employment Data

(Bullion News Network) – Despite stalling in Q3, the job market finished 2024 strong. The Employment Situation Summary released by the Bureau of Labor Statistics (BLS) today reveal that the U.S. added 256,000 jobs in December, outpacing projections and reaffirming that the job market remains strong. Stock prices fell on the news, with the Dow nearly totally erasing its post-election gains. Traders are now more confident that the Federal Reserve will opt to keep interest rates unchanged at its January meeting, according to projections from CME FedWatch. Gold and silver prices moved up today despite the falling odds of an early rate cut from the FOMC. 

Gold is up by more than $20 on the day, bringing the metal within $10 of crossing the $2,700/oz resistance. Silver’s gains once again outpaced gold today, rounding off its sixth consecutive daily win. Silver will end the week above $30.50/ozt, nearly $1 higher than last Friday’s closing price. Silver’s moderate win over gold pulled the gold-silver ratio down .28 to end the week at 88.22:1. Both metals saw prices correlate closely with Fed rate cut speculation in 2024, but the first full trading week of 2025 saw gold and silver prices move opposite to implied rate cut odds. According to some analysts, economic and geopolitical uncertainty in the wake of Donald Trump’s Jan. 20th inauguration may offer a tailwind to safe haven assets like gold and silver this year. 

Last month, the Federal Reserve delivered a notably hawkish rate cut, revising projected rate cuts in 2025 from four to just two. Despite traditionally correlating positively with rate cuts, gold and silver gained in the wake of the newest labor report, which noticeably reduced the implied odds that Americans will see more interest rate relief in January. Safe haven markets are instead eyeing a long list of geopolitical and economic uncertainties poised to take center stage in the first year of President-elect Donald Trump’s second term in office. 

This month, the President-elect ramped up his rhetoric concerning Canada, Greenland, and the Panama Canal, three territorial acquisitions Mr. Trump says may be in the cards for his second term. Canada, Denmark, and Panama rejected the concept, reasserting their sovereignty and, in the case of Canada, threatening their own tariffs in the case of attempted economic coercion by the United States. Paired with ongoing conflicts in the Middle East and the prolonged Russia-Ukraine War, President Trump will inherit quite a few potential crises when he officially takes office on January 20th. 

Analysts say that these uncertainties were a buoy today to precious metal prices, which tend to increase during periods of geopolitical instability, conflict, and recession. Despite a traditionally bearish signal as rate cut bets dropped, gold and silver climbed as investors geared up for Donald Trump’s inauguration. 

Looking forward, traders should expect geopolitical conditions to play as large a role in metal prices as they did in 2024.