AGE Daily Gold Update

AGE Daily Gold Update presents a recap on today's action in the precious metals markets. View archives.

1/10/2025: Gold tops $2,700 on inflation fears

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold surged another 0.9% to close above $2,708 as strong jobs data, rising inflation expectations, and worries about tariffs stoked demand for hedges against economic uncertainty. Gaining 2.4% for the week, bullion closed above $2,700 for the first time since early December. Silver climbed 1% for the day and 4.1% for the week to finish at $31.09 an ounce.

The government’s December nonfarm payrolls report showed 256,000 jobs created last month, far more than the forecast of 155,000. Although totals for November were revised lower, the unemployment rate still dropped to 4.1% from 4.2% the previous month.

While surprising strength in the labor market is good for the economy, it creates more headaches for the Fed in its battle against inflation. A tight labor market typically drives up payroll costs, which are then passed along to consumers as higher prices.

Indeed, US consumers are anticipating sharply higher inflation this year. According to the University of Michigan survey, consumer sentiment is falling because Americans expect inflation to rise to 3.3% in 2025, up from 2.8% last month. Inflation expectations are often self-fulfilling, as people buy more products now to avoid higher prices later, which drives up prices.

Benchmark 10-year Treasury yields and the dollar both rose on speculation that the Fed will be forced into shallower rate cuts this year. Fed fund futures traders now see just 30 basis points of cuts in 2025, down from nearly 50 before the data.

While higher yields and a stronger dollar typically weigh on gold, all three rose in tandem as traders focused on hedging against the threat of higher inflation.

Adding to demand for bullion, investors are broadly concerned that the blanket tariffs proposed by the incoming Trump administration may added to inflationary pressures and possibly cause trade wars, undermining the remarkable strength of the economy.

Platinum rose 1.2% today and 4.4% this week. Palladium jumped 3% for a weekly rise of 2%.

At the New York spot close: gold gained $24.70 to $2,708.50; silver climbed 30 cents to $31.09; platinum picked up $11.80 to $982.10; and palladium advanced $27.60 to $951.50 an ounce.