On December 3 (local time), the U.S. job market sent a warning signal. ADP data showed that private sector employment in the U.S. decreased by 32,000 jobs in November, marking the largest decline since March 2023 and far below the market expectation of an increase of 20,000 jobs. Recruiting activities remained sluggish across multiple sectors including manufacturing and professional services, highlighting the insufficient momentum of economic recovery. This data has directly boosted expectations for a Fed rate cut. According to the CME FedWatch Tool, the probability of a 25-basis-point rate cut in December has soared to 89%.

The weakness in the job market, combined with the easing of inflation, has provided support for a rate cut. Although the U.S. ISM Non-Manufacturing PMI remained in the expansion zone at 52.6 in November, the employment sub-index has contracted for six consecutive months. Meanwhile, the number of small business and personal bankruptcy cases in the U.S. in the first 11 months has exceeded the total of last year, hitting a new high since 2020. The market generally believes that the Federal Reserve will launch a rate cut at its monetary policy meeting from December 9 to 10. Bank of America further predicts that the interest rate will be cut to the range of 3.00%-3.25% in 2026. Driven by rate cut expectations, New York gold prices edged up 0.33% to close at $4,234.8 per ounce, while the yield on the 10-year U.S. Treasury note fell back to 4.063%.