With stocks reeling under the weight of today's disappointing payrolls report - which has raised fears of a faltering economy, just days after the Fed opted to stand pat on interest rates again - gold futures are once again getting a shot in the arm. The precious metal has had a breakout year, bolstered by its status as an inflationary hedge and a safe-haven investment amid a backdrop of stubbornly high prices and flaring geopolitical tensions. Eventual Fed rate cuts should also support gold as the dollar weakens - but that narrative is taking a backseat today in the face of troubling jobs data.
Gold futures for December delivery (GCZ24), the most active contract, jumped 1% this morning to trade above $2,500, after opening at new highs of $2,522. Cash gold is now up more than 19% on a YTD basis, easily outperforming the S&P 500 Index ($SPX), which is clinging to a gain of 12.7%. Many analysts think there's more upside to come, with analysts at major brokerage firms calling for a longer-term rise to $3,000.
