Gold plunged more than $30 in one fell swoop, with spot prices falling to $4,042 an ounce. The reason: U.S. October nonfarm payroll data came in much stronger than expected. 📉
First, the data:
• The unemployment rate in October was 4.1%, versus market expectations of 4.2%; the previous reading was also 4.2%
• August nonfarm payroll gains were revised up from 133,000 to 186,000, an increase of 53,000
• September was revised up from 29,000 to 60,000, an increase of 31,000
• Together, the two months saw 84,000 more jobs added than previously reported
This report wasn’t just strong for the month itself—it also bolstered the figures for the previous two months. The labor market is more resilient than people had thought, and that matters more than any single month’s numbers.
The market reaction was immediate. U.S. short-term interest rate futures fell, and traders increased their bets on another Fed rate hike in December. Remember, the Fed just raised rates on September 16, its first hike since 2023, and the current chair is Kevin Warsh. If employment is this strong, the case for another hike in December becomes more convincing. A stronger dollar and higher interest rates are usually bad news for gold, and this drop in prices is a case in point.
Meanwhile, Canada’s unemployment rate edged up in October to a nearly six-month high, clearly diverging from the U.S. trend.
For risk assets like $BTC , rising rate-hike expectations generally weigh on liquidity, which could make short-term sentiment more cautious. But what I’m more focused on is the inflation data due before December—it will determine whether a rate hike actually happens.
Do you think there’ll be another rate hike in December?
#NFP #Fed #Gold
First, the data:
• The unemployment rate in October was 4.1%, versus market expectations of 4.2%; the previous reading was also 4.2%
• August nonfarm payroll gains were revised up from 133,000 to 186,000, an increase of 53,000
• September was revised up from 29,000 to 60,000, an increase of 31,000
• Together, the two months saw 84,000 more jobs added than previously reported
This report wasn’t just strong for the month itself—it also bolstered the figures for the previous two months. The labor market is more resilient than people had thought, and that matters more than any single month’s numbers.
The market reaction was immediate. U.S. short-term interest rate futures fell, and traders increased their bets on another Fed rate hike in December. Remember, the Fed just raised rates on September 16, its first hike since 2023, and the current chair is Kevin Warsh. If employment is this strong, the case for another hike in December becomes more convincing. A stronger dollar and higher interest rates are usually bad news for gold, and this drop in prices is a case in point.
Meanwhile, Canada’s unemployment rate edged up in October to a nearly six-month high, clearly diverging from the U.S. trend.
For risk assets like $BTC , rising rate-hike expectations generally weigh on liquidity, which could make short-term sentiment more cautious. But what I’m more focused on is the inflation data due before December—it will determine whether a rate hike actually happens.
Do you think there’ll be another rate hike in December?
#NFP #Fed #Gold
