DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.

Spot gold fell in early U.S. trading Friday after October payroll growth crushed expectations, strengthening the case for another Federal Reserve interest rate increase in December. Spot silver posted a modest gain as investors also weighed sharp equity losses and renewed tensions involving Iran and the Strait of Hormuz.

Gold traded near $4,050.95 an ounce at the time of writing, down $34.10, or 0.89%. Silver traded near $51.864, gaining $0.089, or 0.17%.

The U.S. Labor Department reported that nonfarm payroll employment increased by 165,000 in October, far above economists’ expectations for roughly 65,000 new jobs. September payroll growth was revised upward to 60,000 from the earlier estimate, while the unemployment rate declined to 4.1% from 4.2%.

Average hourly earnings rose 0.4% for the month, exceeding expectations for a 0.3% increase, and stood 3.1% higher from a year earlier. The figures showed resilient labor conditions despite elevated borrowing costs, geopolitical uncertainty and recent weakness in technology shares.

Revisions strengthened the employment picture further. August payroll growth was raised by 53,000 to 186,000, while September’s increase was revised upward by 31,000 to 60,000, adding a combined 84,000 jobs to previous reports.

Professional and business services led October hiring with 70,000 new positions, followed by health care with 42,000 and transportation and warehousing with 25,000. Manufacturing employment increased by 19,000, the labor force participation rate remained at 61.9%, and the average workweek held at 34.4 hours.

Before the report, interest rate futures showed about a 70% probability of a 25 basis point increase at the Fed meeting on Dec. 8 and 9. The stronger payroll, wage and unemployment figures reinforced expectations for another increase after concerns about artificial intelligence investment and heavy equity losses had weakened the tightening case.

The two year Treasury yield climbed about 6 basis points to 4.53% after the release, while the dollar advanced. Higher yields and a firmer dollar created another obstacle for gold, reversing some support that falling yields had provided earlier in the week.

Other economic reports also pointed to resilience. Preliminary third quarter data showed nonfarm business productivity advancing at a 3.6% annualized rate, while unit labor costs declined 0.7%, and weekly initial jobless claims fell to 189,000.

September job openings increased to 7.523 million, while the October Institute for Supply Management manufacturing index rose to 55.5. Those figures, combined with the payroll surprise, indicated continued economic strength even as the equity selloff raised concerns about corporate investment.

The S&P 500 fell 4.36% Thursday, while the Nasdaq Composite dropped about 5.52% amid concerns about technology valuations, data center investment and financing conditions. Some investors sold gold to obtain liquidity and cover portfolio losses, temporarily countering its defensive appeal.

Democratic victories in Tuesday’s U.S. midterm elections also remained a secondary market influence after the party secured both chambers of Congress. Investors initially viewed the outcome as potentially restraining future government borrowing through legislative gridlock, but congressional control does not directly determine Federal Reserve interest rate policy.

The next major inflation test arrives Tuesday, Nov. 10, with the October consumer price index. September consumer prices increased 0.6% for the month and 3.7% annually, remaining above the Fed’s 2% objective, while the October producer price index is scheduled for Friday, Nov. 13.

Tensions around the Strait of Hormuz continued to threaten global energy supplies. At least five vessel incidents have been reported in the Gulf since Sunday, while diplomatic efforts through Qatar have not produced a binding settlement between Washington and Tehran.

Nymex WTI crude traded around $90.40 a barrel, while Brent futures stood near $98.20. The benchmark 10 year Treasury yield was near 4.85% before the employment release, and the dollar index had traded near 101.89 earlier Friday.

Gold bulls face resistance between $4,051.45 and $4,088.51, while bears are targeting a break below $4,021.95 and potentially $3,991.58. Silver faces resistance from $53.107 to $54.617, with support at $50.515 and a deeper downside target of $49.013.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.