Gold and silver exhibited remarkable stability in today's trading session, remaining essentially flat despite significant weakness in the U.S. dollar—a development that would typically propel precious metals higher given their inverse relationship with the greenback.
The catalyst for dollar weakness emerged from yesterday's ADP employment report, which revealed October layoffs totaling 153,074, representing the highest monthly job cuts since 2003. This troubling labor market data has intensified concerns about economic uncertainty and materially shifted market expectations regarding Federal Reserve policy. According to the CME's FedWatch tool, the probability of a December rate cut has climbed from 62% yesterday to 70% today, reflecting growing conviction that the central bank will be compelled to ease monetary policy in response to deteriorating employment conditions.
This shift in rate expectations pushed the U.S. dollar index decisively below the psychologically significant 100 level, with the index declining 0.46% to trade at 99.70. Under normal market conditions, such pronounced dollar weakness would be expected to provide substantial support for dollar-denominated commodities, particularly precious metals. However, gold and silver proved largely unresponsive to this favorable tailwind, suggesting other market forces may be temporarily offsetting the typical currency dynamics.
The muted price action comes as both precious metals celebrate a remarkable anniversary. Exactly one year has elapsed since Donald Trump secured re-election to the U.S. presidency for his second term, and the performance of gold and silver over this period has been nothing short of extraordinary. Both metals have outperformed every major asset class during this timeframe, including high-profile performers such as Bitcoin and technology darlings like Nvidia stock.
Since Trump's decisive "red sweep" election victory over Democratic candidate Kamala Harris was confirmed on November 6, 2024, gold bullion has surged an impressive 50.0% in U.S. dollar terms. Silver's performance has been even more robust, climbing 53.1% over the past twelve months. This represents silver's strongest gain following a U.S. presidential election since Barack Obama's first victory during the global financial crisis, when the white metal posted a 78.5% advance amid widespread economic turmoil and aggressive monetary stimulus.
Despite this impressive longer-term trajectory, today's trading reflected minimal volatility in the precious metals complex. Gold futures declined a modest $5.60, or 0.14%, to trade at $3,984.80, while silver futures proved even more stable, slipping barely $0.01, or 0.03%, to last trade at $47.84. This subdued price action suggests the metals may be in a consolidation phase following their dramatic rallies, with investors pausing to assess whether current valuations adequately reflect the macroeconomic backdrop or whether further upside potential remains. The disconnect between dollar weakness and precious metals price action may indicate that markets are currently digesting recent gains rather than aggressively pursuing new highs, at least in the near term.
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