Gold prices retreated on Thursday, trading around 4,060 dollars per ounce and heading toward a weekly decline after delayed employment data reduced market expectations for a Federal Reserve rate cut in December.
The pullback follows a remarkable rally that saw gold reach an all-time high of 4,379 dollars per ounce on October 17, driven by safe haven demand, geopolitical tensions, and anticipation of monetary policy changes. The precious metal had surged to new records multiple times throughout October before consolidating near current levels.
Market sentiment shifted after the Labor Department released its September jobs report, delayed six weeks due to a government shutdown that had frozen federal data collection since early October. The report showed the United States economy added 119,000 jobs in September, more than double the 50,000 forecast by economists and representing a substantial improvement from the 4,000 jobs lost in August, according to revised figures.
Analysts note the employment figures reinforce recent Federal Reserve messaging about labor market resilience. The unemployment rate climbed to 4.4 percent, the highest since October 2021 and slightly above expectations. Wage growth registered at 3.8 percent, marginally above forecasts but suggesting continued earnings pressure.
The timing complicates policy decisions significantly. The Bureau of Labor Statistics (BLS) confirmed it will skip the October employment report entirely, folding select October establishment survey data into the November release scheduled for December 16. This means policymakers will have limited labor market clarity in the weeks before their next meeting.
Federal Reserve officials have signaled caution in recent statements, indicating the central bank remains unconvinced the economy has cooled sufficiently to justify additional rate reductions. That restraint has rippled through financial markets, with traders now pricing approximately 35 percent probability of a December rate cut, down sharply from near-certain odds earlier this month.
Lower expectations for monetary easing typically weaken gold’s appeal, as higher interest rates increase the opportunity cost of holding non-yielding assets. The combination of firmer economic data and hawkish central bank commentary helped push gold down to 4,032 dollars per ounce during Thursday trading, representing a 1.09 percent daily decline.
Federal Reserve Chair Jerome Powell cautioned at the October policy meeting that further rate cuts were not guaranteed, noting strongly differing views among committee members. Minutes from that meeting revealed a sharp split among policymakers, with many suggesting it would be appropriate to maintain rates unchanged through year end, while several supported continued easing.
Despite recent softness, gold remains among the strongest performing assets of 2025. Prices are still approximately 52 percent higher than a year ago, supported by central bank purchases, geopolitical uncertainty, and investor protection strategies amid global instability. Over the past month, however, the metal has declined 1.48 percent, suggesting the record-breaking rally may be cooling.
The delayed November employment report, scheduled for mid-December, will provide critical information for policy deliberations. Market participants will also closely monitor speeches from Fed officials as they weigh whether inflation progress justifies a policy pivot.
Gold’s current pullback reflects market recalibration rather than collapsing demand. With interest rate expectations shifting and economic signals mixed, the metal’s trajectory may depend less on recent data and more on how the Federal Reserve interprets the economy’s capacity to handle maintained borrowing costs.
Source: newsghana.com.gh
