Gold and silver rebound from initial NFP-inspired losses

Outside Market Developments: U.S. nonfarm payrolls jumped 162k in August, beating expectations (+58k) by a wide margin. July's negative print (-23k) was erased with a +44k revision. June was revised up to +31k from +20k. The unemployment rate held steady at 4.1%.

Average hourly earnings rose 0.3%, in line with expectations, versus +0.2% in July; +3.1% y/y, down from 3.2% in July. The average workweek ticked up to 34.4 hours from 34.3 in July.

The labor force participation rate rebounded to a three-month high of 61.6%. The household survey recorded a 569k surge in the number of people reporting having a job, the largest monthly gain since January 2025.

Today’s data reverses a four-month weakening trend in payrolls and underscores the U.S. labor market’s continued resilience. Potential for a September Fed rate cut immediately rebounded from a 50/50 proposition to 60/40 based on Fed funds futures.

Treasury yields rose, particularly on the short end, while the dollar strengthened and major stock indexes traded mixed to slightly lower. Amid uncertainty stoked by the stronger-than-expected jobs data, and with key inflation data still ahead next week, investors are adopting cautious positioning and lighter risk exposure heading into the long Labor Day weekend.

President Trump added to the uncertainty with a post on Truth Social praising the solid jobs report and arguing that the stronger U.S. economy and creditworthiness mean the Fed should immediately lower interest rates to the lowest levels in the world. He warned the central bank and Chair Kevin Warsh to “get smart” and “BE PATRIOTS,” threatening to halt trade with countries running deficits with the U.S. if rates are not cut.

Fed Governor Waller said on Thursday he is leaning toward keeping interest rates unchanged at the September FOMC meeting if the forthcoming August inflation data continues to show progress toward the 2% target. He urged policymakers to “give disinflation a chance,” while noting he would support a rate hike if the data come in hotter than expected.

The Japanese yen posted its strongest weekly gain in over a month, rising roughly 2.2–2.5% against the dollar as USD/JPY dropped from near 160 to as low as 155.30 amid growing bets on a more hawkish Bank of Japan and speculation of intervention. This sharp yen strength contributed to broader pressure on the dollar, which will finish the week lower against a basket of currencies.

Renewed hostilities between the U.S. and Iran continued this week, with American strikes on Iranian targets and Iranian retaliatory strikes on U.S. positions in the region. Brent crude jumped to six-week highs and looks poised to end the week about 6% higher, adding to inflation concerns. In parallel, Israel reported capturing a strategic ridge in southern Lebanon from Hezbollah, further entrenching its presence there.

The Trump administration finalized a landmark oil agreement with Venezuela granting the U.S. significant control and offtake rights over more than 65 billion barrels of proven reserves. While the deal aims to boost Venezuelan output and secure a long-term, low-cost hemispheric energy supply, the news hasn't really provided any price relief yet.

Russian President Putin said on Thursday there is a chance of reaching a peace agreement to end the war in Ukraine, noting that countries including the U.S. and China are ready to support a settlement. He stressed, however, that the conflict must ultimately be resolved directly by Russia and Ukraine themselves, while accusing Kyiv of actions that complicate bilateral talks.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$0.52 (-0.01%)
5-Day Change: +$13.30 (+0.30%)
YTD Range: $3,945.52 - $5,595.02
52-Week Range: $3,540.30 - $5,595.02
Weighted Alpha: +17.45

Gold retreated initially in reaction to the NFP beat as September rate-hike bets were revived and the dollar firmed.  However, intraday losses below $4,300 could not be sustained, as the trade adjusted positions ahead of the long holiday weekend and looked ahead to key inflation data next week. A close below $4,454.11 would result in a second consecutive lower weekly close.



Those inflation reports are due late next week, so gold is likely to trade in a consolidative range until the PPI and CPI data provide a clearer signal on the Fed’s likely path at the September 15-16 FOMC meeting. The 100-day and 200-day moving averages currently offer a reasonable trading range.

A climb above the 200-day MA at $4,538.78 would offer encouragement to the bull camp, returning focus to last week's high at $4,696.31. On the other hand, a retreat below the 100-day at $4,354.07 would suggest potential back to Wednesday's low at $4,283.60.

Long-term support for gold stems from its role as a hedge against persistent inflation, rising global debt levels, and the ongoing debasement of fiat currencies. Strong and sustained central-bank purchases, combined with structural demand from investors seeking portfolio diversification amid geopolitical uncertainty, further underpin the metal’s fundamental outlook.

Near-term headwinds for gold include the risk of sticky inflation readings next week that could reinforce expectations for a September Fed rate hike, supporting higher real yields and a stronger dollar. Stronger-than-expected economic data, such as today’s robust jobs report, may also sustain risk-on sentiment and reduce immediate safe-haven demand for the metal.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: -$0.145 (-0.22%)
5-Day Change: +$0.601 (+0.91%)
YTD Range: $54.778 - $121.630
52-Week Range: $40.547 - $121.630
Weighted Alpha: +41.30

Silver rebounded from intraday losses below $65 to reclaim the 20-day MA as the trade seemed disinclined to go short into the holiday weekend. A close above $66.327 is needed to avert a second straight lower weekly close.

 

As the 20- and 100-day MAs converge, the $66.429/$67.505 value area is worth noting for next week as the trade looks ahead to key inflation data that will set the tone heading into the September FOMC meeting. A convincing move above the 100-day would bode well for further short-term tests above $70.

Long-term support for silver stems from its dual role as both a monetary metal and a critical industrial commodity, particularly in solar panels, electric vehicles, and electronics amid the global energy transition. Structural supply constraints, combined with rising investment demand as a more affordable inflation hedge and portfolio diversifier, further underpin its fundamental outlook.

Like gold, evidence of sticky inflation next week would boost rate-hike bets, favoring higher real yields and a firm dollar. Stronger economic data may also boost risk appetite while raising concerns that higher rates could eventually weigh on industrial demand, adding volatility to the metal.

Below the 20-day MA, today's low at $64.779 protects the more important low for the week at $63.325. Below the latter, the halfway-back point of the July-August rally at $62.941 and the 19-Aug low at $62.574 are levels to watch.


Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
312-549-9986 Direct/Text
[email protected]
www.zanermetals.com

Non-Reliance and Risk Disclosure: The opinions expressed here are for general information purposes only and should not be construed as trade recommendations, nor a solicitation of an offer to buy or sell any precious metals product. The material presented is based on information that we consider reliable, but we do not represent that it is accurate, complete, and/or up-to-date, and it should not be relied on as such. Opinions expressed are current as of the time of posting and only represent the views of the author and not those of Zaner Metals LLC unless otherwise expressly noted.