Gold edges higher, on track for post a modest weekly rise

By Myra P. Saefong

Gold touched a record-high intraday price last week

Gold futures edged higher on Friday, with strength in the U.S. dollar following a stronger-than-expected September jobs report keeping gains in check.

"The big upside surprise in the jobs report nixed market hopes of a half-point cut" by the Federal Reserve at its next meeting," said Brien Lundin, editor of Gold Newsletter. That lifted Treasury yields and the dollar, while sending gold, initially, sharply lower in the "typical inverse fashion."

Gold quickly then moved up in an "impressive rebound," he said.

Gold for December delivery (GC00) (GCZ24) was up $4.60, or 0.2%, at $2,683.80 an ounce on Comex after trading as low as $2,651.60. Based on the most-active contract, prices trade about 0.6% higher than the $2,668.10 settlement from a week ago.

The U.S. economy created 254,000 new jobs in September. Economists had predicted a 150,000 increase in new jobs in September after seasonal adjustments. The unemployment rate, meanwhile, slipped to 4.1% from 4.2%.

Gold prices initially declined in the wake of the data in what Lundin referred to as "merely the latest in a string of fairly weak performances over the past week or so, since the price set another all-time high on September 26."

Gold futures settled at a record-high $2,694.90, and touched an all-time intraday high of $2,708.70 on Sept. 26.

"Pulling back to look at the bigger picture, however, we see that this price weakness appears to be just the latest in a series of pauses the market has experienced in this new bull run that began at the end of February," Lundin told MarketWatch. "In each instance, gold fell or traded sideways for a week or two before taking off on a new rally to a higher trading range."

That's likely to be the case in this instance, he said, "as the steep rise in federal debt, and the costs of servicing that debt, continue apace."

That's one of the primary reasons why the Fed is intent on cutting rates, even as many economic data points remain positive," said Lundin.

-Myra P. Saefong

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10-04-24 1132ET

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