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Gold prices struggling following mixed U.S. employment data; unemployment rate at new historic low

Kitco News

Editor's Note: The article was updated to reflect a drop in the gold price.

(Kitco News) - Gold price are struggling Friday, following mixed reading in the latest U.S. jobs report.

The Bureau of Labor Statistics said 136,000 jobs were created in September; meanwhile, according to consensus forecasts, economists were expecting to see job gains of 145,000.

However, at the same time, the unemployment rate fell to a new historic low at 3.5%. Economists were expecting to see an unchanged reading at 3.7%. A sign of a healthy labor market, some economists noted that the unemployment rate fell because more people found jobs, instead of more people leaving the labor market.

Gold prices were holding relatively steady above $1,500 an ounce ahead of the report and only manged to push modestly higher in initial reaction. With the dust settling, gold prices have dropped into negative territory; December gold futures last traded at $1,510.70.40 an ounce, down 0.18% on the day.

Although the headline employment number missed, the report noted that there were positive revisions to the the July and August numbers. July employment was revised up by 7,000 jobs to 166,000; August employment was revised up to 168,000 from the previous estimate of 130,000.

While people are still able to find jobs, economists say that muted wage growth remains a concern. The report said that average hourly wages were little changed, falling one cent last month to $28.09; the drop comes after August's 11 cent rise. For the year, wages are up 2.9%

Annual wage growth is at its lowest point this year.

Katherine Judge, senior economist at CIBC, siad that the wage growth was the biggest disappointment in September's employment report. However, she added that it appears that the labor market is still relatively healthy.

"Overall, these data are constructive enough to allow the Fed to skip October in our view, and cut in December," she siad.

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