Gold Pressured by Strong Hiring Data

PRECIOUS METALS

Gold: December gold contracts are sharply lower, down 1.7% following October’s strong payroll data. October payrolls increased by 165,000 and unemployment declined to 4.1%, reinforcing evidence of labor-market resilience. The probability of a December Fed hike is priced around 77% from 72.% immediately before the release. The pullback partially reversed Thursday’s advance, when lower yields and easing energy-related inflation concerns supported gold. Despite Friday’s decline, bullion remained approximately 4.5% higher for the week, on course for its strongest weekly performance since late August. Lower prices also encouraged Indian retail demand ahead of Diwali, while Poland’s central bank reported reaching its 700-ton reserve target and left open the possibility of further purchases.

Silver: December contracts are down 1.4% to $51.700.

BASE METALS

Copper: LME copper fell 0.5% to $13,775, putting it on course for a 2.6% decline on the week; US prices are little changed at $6.2655. Concerns about the AI investment outlook weighed on sentiment. Prices earlier touched $13,636, their lowest since late July, before finding support near the 200-day moving average. Investors continued to assess whether opposition to data-center development could slow copper-intensive infrastructure spending, while perceived reductions in the likelihood of US refined-copper tariffs also pressured the market. However, tariff decisions remain under presidential authority, making the election outcome an uncertain guide to implementation

Physical-market tightness continued to cushion the decline. Shanghai Futures Exchange inventories fell more than 24% over the week to 33,848 tons, their lowest level in almost three years. China’s Yangshan import premium reached a record $217.50 per ton, while LME cash copper commanded a $181 premium over the three-month contract, underscoring limited nearby availability outside the US. The COMEX premium over LME copper briefly turned into a discount before recovering, highlighting the unwinding of some tariff-related price distortions rather than clear evidence of a broad physical surplus.

Supply concerns also intensified after Codelco lowered its 2026 production outlook to slightly above 1.2 million tons from a previous target of 1.34 million. The company separately confirmed that it had overstated combined 2024–2025 output by 42,100 tons. The reduced guidance adds to concerns about mine supply, while the historical reporting correction raises questions about the reliability of production estimates; the two should not be treated as a single current-year supply loss.

Zinc: Zinc lost 1.6% to $3,734.

Aluminum: Aluminum fell 0.5% to $3,049.

Tin: Tin advanced 1.7% to $46,250.

Lead: Lead slipped 0.5% to $1,885.

Nickel: Nickel eased 0.2% to $16,285. Indonesia recently announced action against companies linked to a major ore trader over alleged illegal operations in forest areas and possible licensing irregularities. The announcement added to existing supply concerns stemming from tighter Indonesian mining quotas, rising costs and coordinated production cuts. Macquarie expects Indonesia’s exports of nickel and nickel products to decline approximately 6% this year, with attention increasingly turning to the country’s 2027 ore quotas. The extent of any additional disruption from the enforcement action remains uncertain.

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