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Gold price recovers from daily lows as 1.8 million jobs created in July

Kitco News

The unemployment rate fell to 10.2% as total nonfarm payroll employment rose by 1.8 million in July, according to data released Friday by the Bureau of Labor Statistics (BLS).

Gold saw mixed price performances Friday as levels fluctuated Friday morning following the data release; December gold is now at $2,071, up 0.08% on the day.

“These improvements in the labor market reflected the continued resumption of economic activity that had been curtailed due to the coronavirus (COVID-19) pandemic and efforts to contain it,” the BLS said in the report.

Notably, gains in employment occurred in the leisure and hospitality, retail trade, professional and business services, and health care sectors.

“Despite declines over the past 3 months, these measures are up by 6.7 percentage points and 10.6 million, respectively, since February,” the report said.

The number of unemployed workers on temporary layoff also fell by 1.3 million in July to 9.2 million, about half its April levels during the height of the COVID-19 outbreak.

The labor force participation rate remained largely unchanged at 61.4%, while total employment rose by 1.4 million in July to 143.5 million following gains in May and June.

Involuntary part-time workers, or the number for people employed only part-time for economic reasons, fell 619,000 to 8.4 million in July.

The increase in employment joins a host of data released earlier in the week that signal an economic recovery; The July non-manufacturing Purchasing Managers Index PMI exceeded analyst expectations and came in at 58.1%, in expansion territory.

While gold largely ignored the data on Friday, some analysts have said that near-term fluctuations in price should be disregarded by investors who are positioned for the long-term.

E.B. Tucker, director of Metalla Royalty, told Kitco News Thursday that his year-end gold price target is $2,500 an ounce. This comes as Tucker has correctly predicted gold to take out $2,000 an ounce.

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