Gold Ticks Up Even Though U.S. Job Growth Beats Expectations
(Kitco News) - Gold prices edged up after the U.S. economy created more jobs than expected in June.
The Bureau of Labor Statistics said 213,000 jobs were created in June. Economists were projecting to see gains of 200,000.
At the same time, the U.S. unemployment rate rose from 3.8% to 4.0%.
“Over the month, job gains occurred in professional and business services, manufacturing, and health care, while employment in retail trade declined,” said the report released on Friday.
Gold prices saw an uptick following the release of the data, with August Comex gold futures trimming their daily losses and last trading at $1,257.50, down 0.10% on the day.
The U.S. Bureau of Labor Statistics also revised the previous month’s number up to 244,000 from 223,000 originally reported for May.
Meanwhile, wages, another key element in the report, came in below expectations in June. “In June, average hourly earnings for all employees on private nonfarm payrolls rose by 5 cents to $26.98. Over the year, average hourly earnings have increased by 72 cents, or 2.7 percent.”
Economists said that continuously strong job numbers will keep the Federal Reserve on track for further rate hikes.
“The solid 213,000 gain in non-farm payrolls in June, which followed an even stronger 244,000 rise in May, illustrates that labour market conditions remain unusually strong. Together with signs that GDP growth rebounded markedly in the second quarter, that will keep the Fed on course to raise interest rates twice more by year-end,” Capital Economics U.S. economist Andrew Hunter wrote in a note to clients on Friday.
Overall, market reaction to June’s job numbers was muted, said Kitco’s senior technical analyst Jim Wyckoff.
“This jobs report falls into the camp of the U.S. monetary policy hawks, who want the Federal Reserve to raise interest rates at a faster pace. The markets showed little significant reaction to today’s report,” Wyckoff said.