Spot Gold eased on Thursday, but remained not far from a 7 1/2-week high of $4,353.55/oz., underpinned by expectations of further policy easing by the Federal Reserve next year.
Fed Governor Christopher Waller said the US central bank still had room to lower borrowing costs amid a cooling labor market and it would “absolutely” defend its independence if challenged.
Waller’s remarks followed the latest US employment data, which indicated a softening labor market.
Employers in all sectors of the US economy, excluding farming, added 64,000 job positions in November, after shedding 105,000 jobs in October. Employment increased in health care and construction in November, but the federal government continued to lose jobs.
The unemployment rate in the country surged to 4.6% in November from 4.3% in August, while surpassing market expectations of 4.4%. It has been the highest jobless rate since September 2021.
The Federal Reserve delivered a largely anticipated rate cut last week, while policy makers signaled just one 25 bps cut for next year.
Yet, investors continue to expect two rate cuts of 25 basis points each for 2026.
Lower interest rates tend to reduce the opportunity cost of holding Gold, which pays no interest.
Focus now sets on the delayed US CPI inflation report due later today, which may provide further clues over the Fed’s monetary easing path.
Spot Gold was last down 0.27% on the day to trade at $4,326.14 per troy ounce.
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