The mixed U.S. job data and the uncertainty around the Federal Reserve’s next policy decision caused gold and silver prices to trade in a range but with a bearish tilt. A lessening geopolitical risk premium on rumours that Ukraine may cooperate with a proposal to end the war proposed by the United States also puts pressure on prices. As authorities manage economic concerns, silver fell below $50 on Friday due to the anticipation that the US Federal Reserve will not lower interest rates in December.

According to the University of Michigan, the US economic docket indicated that business activity is still strong, but consumer sentiment for November nearly reached its all-time low. Simultaneously, inflation projections were lowered for a period of one and five years. On Wednesday, minutes from the Fed’s October meeting showed that despite cautions that the action could increase the risk of inflation and erode public trust in the central bank, officials decreased interest rates.

The delayed jobs report revealed a mixed picture of the labour market, with nonfarm payrolls increasing by 119,000 in October—much more than the 50,000 gain predicted—while the unemployment rate reached a four-year high. In the meantime, salary growth was somewhat better than expected at 3.8%, while the unemployment rate increased to 4.4%, the highest since October 2021, above the predicted 4.3%.

The Bureau of Labour Statistics combined the October report with the November data instead of releasing the October report due to the shutdown. On December 16, following the Federal Reserve’s next meeting, the combined report will be made public. Concerns over Japan’s debt load caused the yen to plummet to a 10-month low versus the dollar on Thursday after the Japanese government approved a stimulus plan worth 17.7 trillion yen ($112 billion), more than the 13.9 trillion yen package that former Prime Minister Ishiba had announced the previous year.

Austan Goolsbee, president of the Chicago Fed, reiterated on Thursday that he is “uneasy” about frontloading rate decreases, especially because inflation appears to have paused and is beginning to go in the wrong direction. Due to political pressure on the Fed’s independence, geopolitical threats, central bank purchases, and uncertainty around US tariffs, there is still some underlying demand for precious metals as a safe- haven.

Following recent reports that bullion held in China’s PBOC reserves increased to 74.09 million troy ounces in October—the twelfth straight month the PBOC has increased its gold holdings—strong central bank demand for gold is boosting prices. Additionally, according to a recent World Gold Council report, central banks around the world bought 220 MT of gold in Q3, a 28% increase from Q2.

John Williams, the New York Fed, stated that rates might still be lowered in the “near-term,” increasing the likelihood of a move in December. Governor Stephen Miran echoed some of his remarks, stating that the Nonfarm Payrolls data released on Thursday supports a December rate decrease and that he “would vote for a 25-bps cut” if his vote were the marginal one. As a result, the likelihood of a December rate drop is now 71%, a significant increase from about 31% earlier in the day, according to market participants.

Investors are now looking ahead to key US economic data this week, including retail sales, producer inflation and jobless claims, for further guidance.

Gold has been trading in the range of $4000 (~Rs 121,000) and $4150 (~Rs 125,000). Buy on dips around support and sell on rallies around resistance.

Silver has been trading in the range of $49 (~Rs 150,000) to $53 (~Rs 160,000). Buy on dips around support and sell on rallies around resistance. Although silver’s price action has formed a critical double top, sentiment in the marketplace remains relatively stable.

As a minimum, silver will need to break and close below $49 to turn decisively bearish. A confirmation of a double top would need to break the neckline around $47, which will lead to a target $44. On the other hand, if prices defy gravity and rise above $53.50, we can see a run-up towards $56.