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Gold prices edged higher on Wednesday after a US jobs report showed the unemployment rate rose last month, reinforcing market expectations of further interest rate cuts by the Federal Reserve and pushing the dollar lower.
Gold futures rose 0.3% to $4,347.10 an ounce, while spot gold climbed 0.8% to $4,314.10 at the time of writing.
The US dollar index (DX-Y.NYB), which tracks the greenback against a basket of six major currencies, slipped to a two-month low, making dollar-denominated bullion cheaper for overseas buyers.
“The data gives the Fed more reason to cut rates and if they cut rates, that’s bullish for gold … that’s the way the market’s interpreting it right now,” said Bob Haberkorn, senior market strategist at RJO Futures.
US job growth rebounded in November, but the unemployment rate rose to 4.6%, against a backdrop of economic uncertainty linked to president Donald Trump’s aggressive trade policy.
Read more: UK inflation falls more than expected to 3.2% in November as food prices ease
The Federal Open Market Committee announced a quarter-point rate cut last week, with comments from chair Jerome Powell seen by investors as less hawkish than expected. Markets are still pricing in two additional 25 basis-point cuts in 2026. Non-yielding gold typically benefits from a low interest rate environment.
Investors are now awaiting November’s US consumer price index, due later today, and the personal consumption expenditures index, due on Friday.
Oil prices climbed more than 1% on Wednesday after US president Donald Trump ordered what he described as “a total and complete” blockade of all sanctioned oil tankers entering and leaving Venezuela, injecting fresh geopolitical risk into a market already weighed down by concerns over weak demand.
Brent crude futures advanced 1.3% to $59.41 per barrel, while West Texas Intermediate gained 1.4% to $55.89.
Trump has ordered a blockade of all sanctioned oil tankers entering and leaving Venezuela, adding that he now regarded the country’s rulers as a foreign terrorist organisation.
Traders in Asia said the move helped lift sentiment, alongside bargain buying after prices slipped below $60 a barrel on Wednesday. “The price is sentiment-driven by the Venezuelan news for today, but overall, export volumes from Venezuela are relatively small in the global supply share. With all eyes on the Russia-Ukraine discussions, the market is still under downside risk,” one trader told Reuters.
While many vessels lifting oil in Venezuela are under sanctions, others transporting the country’s crude, as well as oil from Iran and Russia, are not. Tankers chartered by Chevron (CVX) are also carrying Venezuelan crude to the US under an authorisation previously granted by Washington.
“Venezuelan oil production accounts for around 1% of global output, but supplies are concentrated among a small group of buyers, mainly Chinese teapot refiners, the US, and Cuba,” said Muyu Xu, a senior oil analyst at Kpler. “Ample supply in the sanctioned oil market is expected to cap any notable upside in Venezuelan crude prices in China, despite anticipated shipment disruptions.”
China is the biggest buyer of Venezuelan crude, which accounts for about 4% of the country’s oil imports.
Sterling slid against the dollar on Wednesday as markets priced in a near-certain interest rate cut by the Bank of England following weaker-than-expected inflation data.
The pound was down 0.7% against the dollar, trading at $1.3322, and 0.5% lower versus the euro, trading at €1.1368.
Markets are now assigning a 98.8% probability to a rate cut at the conclusion of the Bank’s policy meeting at noon on Thursday, with the base rate expected to be lowered from 4% to 3.75%. Before the inflation figures were published, the implied probability of a cut stood at 90%.
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Investors have also increased their expectations for easing over the coming year, with markets now pricing in 66 basis points of rate cuts by next December, up from 58 basis points prior to the release of the data.
Anna Leach, chief economist at the Institute of Directors, said the figures increase “the likelihood of a welcome interest rate cut tomorrow”.
In equities, the FTSE 100 (^FTSE) was higher on Wednesday morning, up 0.8% to 9,766 points.
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