Gold & Silver rally after Fed rate cut, Jobless claims impact

Gold prices remained firm despite a sharp uptick in U.S. jobless claims, indicating that labor market volatility is currently having minimal influence on bullion.

Initial unemployment claims surged past expectations. Gold held above $4,200 an ounce.

While short-term labor data was weaker, the four-week average remains relatively stable, and continuing claims dropped—signaling a nuanced employment picture.

The Federal Reserve's recent 25-basis-point rate cut, its third in a row, provided a major catalyst for precious metals.

The move, while expected, was paired with an unexpectedly dovish stance: the Fed announced plans to buy $40 billion in Treasury bills monthly, a strategy aimed at restoring liquidity.

This action surprised markets and weakened the U.S. dollar, prompting rallies in gold and silver.

Gold surged to $4,268 following the announcement before settling slightly lower.

Silver outperformed, climbing past $62 to reach another record high.

The Fed's dovish tone contradicted earlier assumptions of a more cautious approach, leading to broader market movements, including falling Treasury yields and a dip in the dollar index.

Fed Chair Jerome Powell emphasized that further rate adjustments would depend on incoming data.

He noted cooling labor markets and moderating services inflation, though goods inflation remains elevated due to tariffs.

While Powell dismissed the idea of imminent rate hikes, he signaled that future cuts would require stronger justification, especially given internal Fed disagreements on risk prioritization.

In China, economic officials hinted at further interest rate cuts and supportive fiscal measures to counteract slowing growth.

This reinforces expectations of global monetary easing, which is typically favorable for precious metals.

Strong demand fundamentals continue to support the metals rally.

Central banks, particularly China’s, remain consistent buyers of gold.

ETF inflows and robust physical demand in Asia are keeping supply tight.

Meanwhile, the gold-silver ratio narrowed, suggesting potential for further silver outperformance.

Looking ahead, technical indicators show gold bulls eyeing a breakout above $4,433, while bears aim to push prices below $4,100.

For silver, momentum points to a continued rally if resistance at $70 is breached, with downside risks limited if support near $57 holds.

With Fed policy in a holding pattern and geopolitical and economic uncertainties mounting, gold and silver are benefiting from their dual role as safe havens and inflation hedges—making them increasingly attractive in the current market landscape.