(Kitco Commentary) - Precious metals exhibited lackluster performance this week, with neither geopolitical tensions nor anticipated Federal Reserve monetary policy easing providing sufficient momentum for sustained gains. Gold futures declined approximately $15 (-0.38%) in Friday's session and shed roughly $24 (-0.59%) for the week overall.
Throughout the five-day period, gold traded within a $100 range, establishing a floor at $4,000 and a ceiling at $4,100. The weekly low materialized on Tuesday when prices briefly breached the $4,000 threshold, touching $3,997. Wednesday saw gold futures reach their weekly peak at $4,134 before surrendering most gains, forming an extended upper shadow on the daily candlestick chart.
Employment Data Shifts Rate Cut Expectations
On Thursday, the Bureau of Labor Statistics released its initial report following the recent government shutdown. October's employment data revealed stronger-than-anticipated job creation, with 144,000 positions added—substantially exceeding consensus estimates of approximately 50,000. However, the unemployment rate continued its upward trajectory, approaching a four-year high of 4.4%.
The September employment report, originally scheduled for October 3, represented the first major economic indicator delayed by the government shutdown. Since BLS had completed data collection before operations ceased on October 1, this report was among the first published following the government's reopening.
BLS announced Wednesday that the October employment report, initially due November 7, will not be released independently. Instead, those figures will be incorporated into the November report scheduled for December 16—following the Federal Reserve's next policy meeting.
Market participants have responded with markedly increased expectations for a rate reduction at the upcoming Federal Open Market Committee meeting, as reflected in substantial movement in the CME FedWatch tool.
Geopolitical Developments
Reports indicate that U.S. officials have pressured Ukrainian leadership to accept a peace agreement requiring territorial concessions to Russia. According to Reuters, Ukrainian President Zelenskyy faces a Thursday deadline to accept the administration's 28-point proposal, or risk reduced intelligence sharing and weapons supply.
Both Kyiv and Moscow have denied prior knowledge or approval of the proposal. Western media sources suggest the plan was developed between U.S. negotiator Steve Witkoff and Kremlin official Kirill Dmitriev without European or Ukrainian participation, with terms closely aligning with Russia's existing demands.
Silver Tests Critical Technical Support
Silver concluded the week below the $50 level, marking its first close beneath this key threshold since November 7. The metal declined $0.77 (1.5%) to settle at $49.91. Despite surrendering this critical support level, silver recovered substantially from an intraday low of $48—a $1.86 rally during New York trading hours.
Notably, the session low corresponded with the 50-day simple moving average, a technical indicator that has provided support for silver futures over the past four months (129 days), with only one brief violation in August. This technical confluence may have presented an attractive entry point for long-positioned traders.
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