Gold Prices Jump As U.S. Weekly Jobless Claims Rise By 53K, Hitting 16-Month High
(Kitco News) - Gold prices are trading near session highs following a sharp rise in initial weekly jobless claims, according to the latest data from the U.S. Labor Department.
The latest numbers show new employment claims increased by 53,000, to 253,000 claims. The data significantly missed expectations as economists were expecting a modest jump to 215,000 claims. The government revised the prior week’s tally up by 1,000 to 200,000 jobs.
“This is the highest level for initial claims since September 30, 2017 when it was 254,000,” the report said.
Meanwhile, the four-week moving average for new claims – often viewed as a more reliable measure of the labor market since it smoothens out week-to-week volatility – increased by 5,000 claims to 220,250.
Continuing jobless claims, the number of people already receiving benefits and reported with a one-week delay, increased by 69,000 to a seasonally adjusted 1.782 million during the week ending Jan. 19, the government said.
“This is the highest level for insured unemployment since April 28, 2018 when it was 1,794,000,” the report said.
The gold market has been enjoying strong momentum following Wednesday after the Federal Reserve said it would pause its monetary policy tightening as risks to the global economy rise. Since then gold has pushed solidly higher, hitting session highs on initial reaction to the latest employment data. April gold futures last traded at $1,330.20 an ounce, up more than 1% on the day.
Although the employment data was weaker-than-expected some economists are shrugging off the numbers saying that the rise could be due to seasonal quirks and should fall back to normal levels within the next few weeks.
The data comes as most economists have touted the strength of the U.S. labor market, which has been a significant bright spot for the U.S. economy. After today’s data markets will be anxious to see the official government numbers released tomorrow.
However, some commodity analysts have said that investors should pay closer attention to the wage data. There are growing expectations that wages will rise, pushing inflation higher, as the U.S. economy continues to experience full employment.