Gold prices attracting some new bullish attention after U.S. economy created 50k jobs in December

(Kitco News, Friday. Jan. 9th, 2025) – After spinning its wheels in elevated territory, the gold market appears to be gaining new bullish traction as momentum in the U.S. labor market continues to slow.

The first clean employment report since August—delayed by the U.S. government’s 43-day shutdown through October—shows the economy created fewer jobs than expected.

U.S. nonfarm payrolls rose by 50,000 in December, the Bureau of Labor Statistics reported on Friday. This figure missed consensus forecasts, as economists had anticipated job gains of around 66,000.

The gold market pushed into positive territory in its initial reaction to the latest employment data. Spot gold last traded at $4,486.60 an ounce, up 0.21% on the day.

Not only were December’s employment gains disappointing, but previous employment data continues to be revised sharply lower. The report said October’s employment data was revised down to -173,000, compared to the initial estimate of -105,000. At the same time, November’s numbers were revised lower to 56,000 jobs from the initial estimate of 64,000.

“With these revisions, employment in October and November combined is 76,000 lower than previously reported,” the report said.

One bright spot for the U.S. economy is that wages have remained relatively resilient. The report said average hourly wages increased by 0.3%, or 12 cents, last month to $37.02.

“Over the past 12 months, average hourly earnings have increased by 3.8 percent,” the report said.

According to some analysts, the latest employment data should continue to provide solid support for gold as the labor market weakens, even as wage inflation remains elevated. There are growing expectations that the Federal Reserve will continue to cut interest rates through 2026 despite sticky inflation pressures. Analysts explained that this environment will drive real yields lower, reducing gold’s opportunity costs as a non-yielding asset.