(Kitco News) – Slack continues to build in the U.S. Labor market as the number of American workers applying for first-time unemployment benefits remains at elevated levels. However, the gold market is seeing little reaction to the latest labor market data.
Jobless Claims Fall Slightly Less Than Expected
Thursday, the U.S. Labor Department said that weekly jobless claims fell by 10,000 to 222,000 during the week ending May 11, down from the previous week’s revised estimate of 232,000 claims. Jobless claims fell slightly less than expected, with economists forecasting a drop to 219,000.
The gold market is not reacting much to the latest labor market data. It is experiencing some technical selling pressure after testing resistance just below $2,400 an ounce. June gold futures last traded at $2,385.30 an ounce, down 0.40% on the day.
Continuing Jobless Claims Increase
The four-week moving average for new claims rose to 217,750, an increase of 2,500 claims from the previous week’s revised average. Along with elevated initial claims, the data shows that some laid-off workers are having trouble finding new employment. Continuing jobless claims were at 1.794 million during the week ending May 4, increasing by 13,000 from the previous week’s revised level.
Implications for Gold Market and Federal Reserve Policy
Economists continue to watch the U.S. labor market closely, as it remains a key factor in the Federal Reserve’s monetary policy. Some analysts note that gold’s latest drive to $2,400 was due to last week’s significant jump in first-time unemployment claims, supporting expectations that the Federal Reserve is on track to cut interest rates this year.
Additional Insight:
While the gold market may not be reacting significantly to the latest labor market data, investors should monitor how ongoing slack in the job market could impact consumer spending and overall economic growth. If jobless claims remain elevated and workers continue to struggle to find employment, it could signal broader economic challenges ahead, potentially affecting gold prices in the long term.
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