Gold price sees little movement following Powell's outlook on U.S. labor market
(Kitco News) - The gold market is holding on to its some of its gains as it remains below critical resistance around $1,850 an ounce and sees little reaction from the latest comments from Federal Reserve Chair Jerome Powell.
Wednesday, in a speech at the Economic Club of New York, Powell highlighted the ongoing issues in the U.S. labor market as the U.S. economy continues to feels the devastating effects of the COVID-19 pandemic.
Powell noted that in the latest employment data from January, more than 10 million people are still out of work compared to February 2020.
Although the U.S. unemployment rate has fallen sharply from more than 14% to 6.3% last month, Powell noted that this statistic is not capturing the full impact the pandemic has had on American workers.
"The pandemic has led to the largest 12-month decline in labor force participation since at least 1948. Fear of the virus and the disappearance of employment opportunities in the sectors most affected by it, such as restaurants, hotels, and entertainment venues, have led many to withdraw from the workforce," he said in his statement.
In the face of a weakened labor market, Powell also reiterated the Federal Reserve's commitment to maintain its current accommodative monetary policy. Despite the grim statistics, Powell has not provide any new central bank forward guidance or new light on potential monetary policy action.
"We expect that it will be appropriate to maintain the current accommodative target range of the federal funds rate until labor market conditions have reached levels consistent with maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time," Powell said, reiterating the central bank's stance from its January monetary policy meeting.
The gold market is not seeing much reaction to Powell's latest comments. April gold futures last traded at $1,843.70 an ounce, up 0.34% on the day.