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Gold prices see some selling pressure but holding around $1,800 following strong rise in U.S. nonfarm payrolls
(Kitco News) - The gold market continues to hold steady around the $1,800 mark seeing little movement following solid growth in the U.S. labor market.
Friday, the Bureau of Labor Statistics said 467,000 jobs were created in January. The data significantly beat expectations economists were forecasting job gains of around 110,000.
While the headline line employment number was stronger than expected, the unemployment rate missed expectations, rising to 4.0%, a tick higher than in December.
The gold market is seeing some selling pressure following the latest employment numbers; however, the precious metal continues to hold the critical psychological level. April gold futures last traded at $1,802.80 an ounce, roughly unchanged on the day.
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Some market analysts have said gold could be holding up against the strong employment gains because of rising wage inflation. The report said that average hourly earnings jumped 0.7% last month, up from December's increase of 0.6%. Economists were looking for a 0.5% increase.
For the year, wages are up 5.7%, the report said.
Some economists have noted that while the headline print all but guarantees the Federal Reserve raise interest rates in March, rising inflation will mean that real interest rates will remain in negative territory, which is a positive environment for gold.
Andrew Hunter, senior U.S. economist at Capital Economics, said that the solid employment numbers could continue to fuel expectations that the Federal Reserve will raise interest rates by 50 basis points in March.
"Although we still think that a sharp slowdown in economic growth in the first quarter will give officials second thoughts," he added.
