PRECIOUS-Gold gains on risk aversion despite strong US payrolls data

ReutersNov 5, 2025 2:20 PM

U.S. October private payrolls rise by 42,000
Equities down on concerns of stretched valuation
Traders see 70% chance of U.S. interest rate cut in December

By Noel John

Nov 5 (Reuters) - Gold prices rose over 1% on Wednesday, lifted by investors avoiding risky assets despite stronger-than-expected private payrolls data in the U.S.

Spot gold XAU= was up 1.1% at $3,976.15 per ounce by 08:58 a.m. ET (1358 GMT). U.S. gold futures GCcv1 for December delivery rose 0.7% to $3,986.40 per ounce.

"Gold and silver are modestly higher despite a stronger-than-expected ADP private payrolls report, which is the best broad jobs indicator given the shutdown. This should give comfort to bulls who were surprised that metals fell along with risky assets yesterday," said Tai Wong, an independent metals trader.

U.S. private employment increased by 42,000 jobs last month, above Reuters estimate of a 28,000 rise, the ADP employment report showed on Wednesday. A strong jobs market typically reduces likelihood of rate cuts and can even keep rates higher for longer.

Stocks fell on Wednesday, retreating from record highs on fears equity markets may have become overstretched. MKTS/GLOB

"Some safe-haven demand has surfaced at mid-week as the global stock markets are still a bit shaky amid ideas U.S. stocks are overvalued and that there is an AI stock bubble," said Jim Wyckoff, senior analyst at Kitco Metals, in a note.

Meanwhile, the U.S. Federal Reserve cut interest rates last week, with Chair Jerome Powell indicating it could be the final reduction this year.

Traders now see a 70% chance of another rate cut in December, down from over 90% last week. FEDWATCH

Non-yielding gold tends to do well in a low-interest-rate environment and during times of economic uncertainty.

Eyes will also be on a U.S. Supreme Court hearing later in the day on the legality of President Donald Trump's tariffs, after a lower court ruled the administration had overstepped authority by imposing levies under an emergency law.

Elsewhere, spot silver XAG= gained 1.9% to $47.98 per ounce, platinum XPT= rose 1% to $1,550.60 and palladium XPD= climbed 2.2% to $1,421.96.

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