Gold prices are holding their ground above USD $4,300 per ounce, as the latest US labour market data point to an economy that remains resilient but is clearly losing momentum.
After a further delay in the release of the nonfarm payrolls report, the US Labor Department confirmed that 64,000 jobs were created in November, comfortably beating market expectations of 51,000. However, beneath the headline figure, signs of cooling are becoming more apparent.
The unemployment rate edged higher to 4.6%, up from 4.5%, defying forecasts that it would remain unchanged. No official employment data were released for October due to the 43-day government shutdown, adding further uncertainty to recent labour market trends.
While November’s job creation exceeded expectations, economists continue to highlight a clear slowdown in employment growth. Revisions to previous months reinforced this view, with August revised to a loss of 26,000 jobs, compared with an earlier estimate of a 4,000 decline. September’s figures were also downgraded to 108,000, from an initial reading of 119,000.
Gold prices were volatile immediately following the release of the data but quickly stabilised. Spot gold last traded near USD $4,307 per ounce, little changed on the session, as traders weighed solid headline jobs growth against softer underlying fundamentals.
Further pressure came from weaker-than-expected wage growth. Average hourly earnings rose just 0.1% in November to USD $36.86, below September’s 0.2% increase and well short of the 0.3% rise economists had forecast. This marked the slowest pace of wage growth since March 2024, dampening near-term inflation expectations.
Despite ongoing job creation, several economists believe the data are unlikely to stop the Federal Reserve from cutting interest rates next year, with markets currently pricing in three potential rate cuts in 2026.
Lower interest rates typically support gold by reducing the opportunity cost of holding a non-yielding asset. However, some analysts caution that the immediate outlook remains mixed.
Aaron Hill, Chief Market Analyst at FP Markets, noted that softer wages reduce gold’s appeal as an inflation hedge in the near term. He suggested gold around USD $4,290–$4,300 could face renewed downside pressure, with potential moves toward USD $4,220, although risk-off sentiment could still trigger rebounds toward USD $4,320.
Meanwhile, Chris Zaccarelli, Chief Investment Officer at Northlight Asset Management, expects the Federal Reserve to continue easing policy in the year ahead. He noted that the central bank is likely to prioritise employment risks over inflation concerns, even as inflation remains stubbornly above the Fed’s 2% target.
For now, gold remains firmly supported above USD $4,300, as investors balance slowing economic momentum, shifting rate expectations and ongoing macro uncertainty.
