Gold and Silver Prices Drop After Strong US Jobs Report

Gold and silver prices fell on Friday as stronger-than-expected US jobs data raised expectations that the Federal Reserve could raise interest rates at its policy meeting next month. On the Multi Commodity Exchange, the December gold futures contract dropped by ₹1,700 to ₹1,42,930 per 10 grams. Even with this drop, gold was still on track to break a three-week losing streak after gaining nearly ₹4,000 during the week. Silver futures fell 1.26% to ₹1,84,800 per kilogram. Despite this slip, silver remained on track for its first weekly gain in five weeks, having surged by more than ₹5,700 this week, though it stays down around ₹50,000 so far in 2026. The US Labor Department reported that American employers added 165,000 jobs in October. This number is more than double what economists expected and much higher than the average monthly gain of 48,000 over the past year. This strong employment growth boosted confidence in the US economy while raising worries that the central bank might tighten monetary policy to fight inflation. Investors now see a 77% chance of a 25 basis point rate hike at the December Fed meeting, according to CME FedWatch data, up about 10 percentage points from Thursday. Consumer confidence also showed signs of improvement as the University of Michigan consumer sentiment index rose to 51 in early November from 48 in October. Meanwhile, the US dollar rose 0.6% to 102.2, making precious metals more expensive for buyers using other currencies. Inflationary pressures also keep rate hike expectations alive. The US Personal Consumption Expenditures price index increased 0.5% in September, pushing annual inflation to 3.6% and core inflation to 3.1%. The Consumer Price Index rose 3.7% in September from a year earlier, up from 3.4% in August. At the same time, the US economy grew at an annualized rate of 3.4% in the third quarter, beating market forecasts of 3.2%. Last week, the Federal Reserve kept its benchmark interest rate unchanged at 3.75% to 4% with a 10-2 vote, but persistent inflation above the 2% target leaves the interest rate path uncertain.

Context

Precious metals like gold and silver often move inversely to interest rates and the strength of the US dollar. When job growth and inflation run higher than expected, central banks tend to keep borrowing costs high to cool down the economy, which makes non-yielding assets like gold less attractive to investors.