Daily Gold Market Report

Anticipating U.S. Rate Cuts in 2024
Market Expectations Versus Economic Realities

(USAGOLD – 12/06/2023) The gold market is experiencing a resurgence in purchasing activity due to a notable slowdown in the U.S. labor market last month, as reported by recent figures from the private-sector payroll company ADP. Gold is trading at $2,031.75, up $12.39 cents. Silver is trading at $24.22, up 6 cents. US businesses advertised 8.7 million job vacancies in October, down from 9.6 million in September, according to the labour department’s Job Openings and Labor Turnover Survey released on Tuesday. Business Insider also reported that layoffs also have remained an unfortunate reality of 2023, continuing pace with the cuts made at dozens of companies toward the end of last year. While markets are pricing in a high likelihood of rate cuts by May 2024, the actual evidence to support this, such as a slowdown in employment and core inflation, is not yet apparent as these a lagging indicators. Employment reports, including the monthly report from the Bureau of Labor Statistics, indicate healthy employment gains, suggesting that the Fed may not be inclined to signal cuts yet. The resolution of strikes by the Screen Actors Guild and United Auto Workers positively impacted non-farm job gains, and there is an expectation of a rebound in the service sector in November, although this rebound is projected to stay below the long-term average. The overall sentiment is that while there are expectations of rate cuts in 2024, more significant evidence of an economic slowdown is needed for these to materialize.