Jobs Data Puts December Rate Cut in Question: Gold Trades In Holding Pattern

[Ben Graham]

The September jobs report, which arrived seven weeks late, due to the U.S. government shutdown revealed that 119,000 new jobs were created that month. That far outpaced expectations for a 50,000 job gain. The better-than-expected September jobs report called into question whether or not the Federal Reserve will pull the trigger on a third interest rate cut when it meets in December.

U.S. stocks initially gained on the news, but quickly reversed lower and wiped out earlier gains as concerns about an AI bubble continue to press equities lower. Gold largely traded sideways and is consolidating in a sideways holding pattern between $4,000 and $4,212 an ounce.

The long-term trend for gold points higher and the precious metal has gained over 50% since the start of the year. The neutral sideways phase is a temporary holding pattern as the metal takes a much needed breather.

While the fresh jobs data is a look in the economy’s rearview mirror back to September, it is the last major piece of labor market data the Fed officials will see before they meet next on December 9-10.

The stronger than expected payrolls number could provide cover for those Fed officials who want to take a break from easing and hold interest rates steady at the December gathering. However, Fed officials appear deeply divided over the path of monetary policy, according to the minutes from the latest meeting.

“In discussing the near-term course of monetary policy, participants expressed strongly differing views about what policy decision would most likely be appropriate at the Committee’s December meeting,” the minutes read.

What does this mean for gold? What does this mean for stocks?

Gold benefits from Fed interest rate cuts, so a pause in the Fed’s recent rate cuts would be a neutral signal for the precious metal. For stocks, it is a different picture. The stock market has in part been climbing amid expectations of a series of rate cuts this year and if the Fed fails to deliver, it will create additional downside momentum for an already fragile stock market.

For investors this is a pivotal moment.

The stock market is getting hammered as the S&P 500 sank below its 50-day moving average for the first time in 138 days. As stocks slid lower, bitcoin also fell sharply trading below $87,000. All in all, it was an ugly day on Wall Street for stock investors following the jobs report and the near-term trend for stocks points down. The stock market may well be on the precipice of a larger and sustained collapse that has been months in the making driven by a few large-cap technology stocks.

Now’s your chance to take action to protect your portfolio.

If you’ve been sitting on the sidelines, take a look at your portfolio today. We’ve seen many investors rebalancing their portfolios in recent weeks, cashing in on overstretched stock positions and funneling those assets into the safety of gold and silver.

Wall Street traders like to say: stocks take the stairs higher and the elevator down. Use today’s sideways consolidation in gold to increase your exposure to precious metals. With forecasts at $5,000 for gold in 2026–the gold trade is a one-way trade higher. Over the next few weeks or months, stocks could be a one-way trade lower.

When stocks crash, precious metals climb. Take advantage of this brief moment in time before the stock market is down 20% or 30% and make your portfolio shift today. Do you have questions or want to talk through what investment moves are best for you and your unique financial situation? Blanchard stands ready to assist–call us today!

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