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Gold Prices Jump As U.S. Economy Created 75K Jobs In May

Kitco News

(Kitco News) - Gold prices are near session highs following significantly weaker-than-expected labor growth last month.

Friday, the Bureau of Labor Statistics said 75,000 jobs were created in May, economists were expecting to see job gains of around 177,000.

Gold prices have been trading near their highest level in three months as fear sentiment has gripped financial markets. The latest employment data will not do much to shift sentiment in the marketplace as recession fears continue to grow. August gold futures last traded at $1,348.90 an ounce, up 0.42% on the day.

(Kitco News) - Gold prices are near session highs following significantly weaker-than-expected labor growth last month.

Friday, the Bureau of Labor Statistics said 75,000 jobs were created in May, economists were expecting to see job gains of around 177,000.

Gold prices have been trading near their highest level in three months as fear sentiment has gripped financial markets. The latest employment data will not do much to shift sentiment in the marketplace as recession fears continue to grow. August gold futures last traded at $1,348.90 an ounce, up 0.42% on the day.

While the headline number was weaker than expected the unemployment rate held steady at 3.6%, which was in line with economist expectations.

The employment report also highlighted muted wage pressures with average hourly earnings increasing less than expected.  The report said that wages increased by 0.6% or 0.2% for the month to $27.83. Economists were expecting to see wage growth of 0.3%. For the year wages have increased 3.1%.

The report also showed lower employment revisions for April and March. April employment was revised down to 224,000 from the previous reading of 189,000; meanwhile March data was revised down to 153,000 from the previous estimate of 189,000.

Although the data will not do much to alleviate growing recession fears in the marketplace, many economists are shrugging off the latest employment numbers noting that the previous job growth was unsustainable in a late-stage business cycle.

The latest data, according to some economists is not expected to have much impact on the Federal Reserve, which means later in the month. However markets continue to price in aggressive rate cuts by the end of the year.

“Fed speakers have been hinting recently that they may be willing to cut interest rates given uncertainty around trade and tariffs, and signs of a slowing economy will further push them in that direction,” said Andrew Grantham, senior economist at CIBC Capital Markets. “While they are unlikely to respond to just one payrolls print, we now expect that a slower economy and continued trade uncertainty could see a cut in Q4 of this year.

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