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Gold Pushes Above $1,200 Following 235K Rise In U.S. Employment
(Kitco News) - Gold prices continue to hover around the $1,200 an ounce, a key support area for some technical analysts, as the U.S. economy created more jobs than expected in February.
Friday, The Bureau of Labor Statistics said 235,000 jobs were created in February, economists were expecting to see job gains of around 196,000. The strong gains also come following modest revisions to December and January data. The report said that December’s jobs gains were revised down to 155,000, from the previous level of 157,000; at the same time January’s numbers were revised up to 238,000, from the previous level of 227,000.
“Over the past 3 months, job gains have averaged 209,000 per month,” the report said.
The unemployment rate came in at 4.7% in line with expectations and down compared to January’s level at 4.8%;
Gold prices were under some selling pressure, dropping below $1,200 an ounce ahead of the data; the market but in a delayed reaction, the market has turned positive on the day. April gold futures last traded at $1,204.50, up 0.12% on the day.
Positive for the gold market is the fact that wage pressures are rising, an indication many analysts say will lead to higher inflation. Average hourly wages last month came in at $ 26.09 up 6 cents or 0.2%, which was slightly down from expectations. Economists were expecting to see a rise of 0.3%. However this followings a 5-cent rise seen in January.
While the data was stronger than expected, Andrew Grantham said that market reaction could be muted as a March rate hike from the Federal Reserve was already largely priced ahead of the report.
“It was a solid payrolls release, but not surprisingly so…” he said. “Overall, the employment report easily climbed over the pretty low bar set by Fed officials for another hike next week, however that was largely priced in and market reaction could be limited as a result.
The mining sector continues to see some improvement in its labor market. The report said that 8,000 were created in mostly support activities for the industry. The Mining sector has created 20,000 new jobs since its lows seen in October 2016.
