November Labor Data Friendly to Gold

Precious Metals

Gold: Gold prices higher following the release of November’s nonfarm payrolls report, which came in above expectations but showed an uptick in the unemployment rate and largely reflected subdued hiring conditions. November payrolls rose by 64,000, while revisions to August and September saw the labor market shed 33,000 jobs. August’s figure was revised from -4,000 to -26,000, while September’s figure dropped from 119,000 to 108,000. Gains in the labor market came from the healthcare sector, which gained 46,000 jobs and tends to move acyclic and hires regardless of economic conditions. Headline job gains have been carried by the healthcare sector and taking the sector’s gains out of the picture, it is likely the economy would be losing jobs.

Markets are currently pricing in two rate cuts from the Fed next year, while January Fed Funds futures are implying a 24% chance of a rate cut at January’s meeting, unchanged from yesterday. Traders are now eyeing this week’s November’s CPI report out on Thursday for further clues on monetary policy. Fed Chair Powell last offered remarks that were less hawkish than expected, sending yields and the dollar substantially lower, although longer-dated yields have climbed above pre-meeting levels. On the geopolitical front, Russia’s central bank said on Friday plans by the European Union to use Russian assets to extend a loan to Ukraine were illegal and that it reserved the right to employ all available means to protect its interests.

Markets will also monitor any news regarding the Supreme Court’s ruling on President Trump’s sweeping tariffs, as the president recently signaled that he expects an unfavorable ruling. President Trump has continuously reiterated that the effects of appealing the tariffs could be disastrous for the economy, signaling that he could be expecting an unfavorable ruling towards his trade policies. Trump did suggest that the tariffs could stay but would require a longer implementation process, while calling the ruling the greatest threat to national security in history. Trump argued that his method of instituting tariffs is far less cumbersome than other methods, suggesting that if the court knocks down his tariffs, there are still feasible ways to implement them.

Silver: Silver futures are little changed at $63.63 following November’s labor data. Silver fundamentals have been supportive of prices as expectations that industrial demand for silver will pick up in the coming years. Sectors including solar energy, EV’s, data centers, and artificial intelligence will drive industrial demand higher through 2030, the Silver Institute industry association recently noted in a research report. Prices have also been supported by persistently low supplies and dwindling global inventories, which have contributed to a supply-demand deficit that is expected to be maintained over the coming years.

Platinum: Platinum is up 3.2% at $1,874.

Base Metals

Copper: Copper prices are lower following labor data out of the US as markets continue to digest weak data and worries about the property sector in top consumer China. Benchmark three-month copper on the LME fell 0.2% to $11,635 after hitting a record high of $11,952 last Friday. Supply disruptions and continued shipments to the US are expected to offer copper a solid price floor but focus on demand in China will also play a large factor in price direction. Thin liquidity conditions are expected until year end, leaving the metal vulnerable to volatility.

Disappointing economic reports out of China came Sunday night,  showing retail sales growth that was much weaker than expected, while fixed asset investment fell 2.6%, which was worse than an expected -2.3% and below the previous -1.7% reading. China’s factory output growth slowed to a 15-month low, while retail sales posted their worst performance since the country abruptly ended its “zero-COVID” curbs, highlighting the urgent need for new growth drivers heading into 2026. The Financial Times reported that China’s President Xi even reacted to the investment report, where he apparently called government spending “reckless”. He criticized outsized investment zones and wasteful spending. He said government officials should pursue “genuine growth without exaggeration” and that “those who are unrealistic, hasty, reckless and haphazard in their efforts will be held strictly accountable”. China has recently pledged to keep expanding domestic demand and the broader economy in 2026.

Morgan Stanley expects  copper to experience a 260,000 ton deficit for 2025 and a 600,000 ton deficit for 2026. Copper inventories outside the US are low and could continue to shrink if imports continue as increased data center demand exceeds supply growth.

Meanwhile, daily inflows to COMEX copper stocks, already at a record high, continued due to higher prices in the US. The US excluded refined copper from the 50% import tariffs that came into force in August but kept it under review, which has led to expectations that US tariffs on copper will be announced in mid-2026. That dynamic has lent continued support to LME -COMEX arbitrage, as US inventories of copper reach over 500,000 tons. As long as US prices remain elevated due to tariff expectations, flows into the US are expected, keeping LME-COMEX arbitrage trade going.

Zinc: Zinc dropped 1.0% to $3,062.

Aluminum: Aluminum rose 0.5% to $2,880. Daily LME data showed that on-warrant aluminum stocks in the LME-registered warehouses fell to 452,600 tons after fresh cancellation of 32,025 tons in Malaysia. Australia’s South32 said it would place the Mozal aluminum smelter in Mozambique under care and maintenance by March after failing to secure a power deal with the government. Morgan Stanley expects aluminum prices to reach $3,250 per ton by the second quarter of 2026 as demand outpaces supply.

Tin: Tin gained 0.4% to $41,100.

Lead: Lead gained 0.5% to $1,950 after hitting $1,952 for its lowest since May.

Nickel: Nickel was down 0.2% at $14,320.

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