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Gold price steady above $1,940 as U.S. job numbers surprise with strong gains

Kitco News

(Kitco News) Gold was fairly steady and trading above $1,940 an ounce after the U.S. employment data from February surprised on the upside.

U.S. nonfarm payrolls rose by 678,000 last month, according to the Bureau of Labor Statistics. The monthly figure was well above the market consensus estimate of 400,000. The January data was also revised up to 481,000 positions added.

The U.S. unemployment rate also dropped to 3.8%, beating market consensus calls for a decline to 3.9% in February.

The number of unemployed also dropped to 6.3 million. Compared to February 2020, before the COVID-19 pandemic began, the unemployment rate was at 3.5% and the number of unemployed was at 5.7 million.

“Job growth was widespread, led by gains in leisure and hospitality, professional and business services, health care, and construction,” the report noted.

The labor force participation rate ticked up to 62.3% in February. Year-over-year average hourly earnings, which is another key element in the report, rose by 5.1% last month, below markets’ expectations of a 5.8% increase and following January’s downwardly revised gain of 5.5%.

Another solid jobs report gives the final green light to the Federal Reserve’s upcoming rate hikes, said Capital Economics senior U.S. economist Michael Pearce.

“That will give the Fed greater confidence to push ahead with its planned policy tightening but, with wage growth now levelling off, there is arguably less pressure for officials to front-load an aggressive series of rate hikes over the coming months,” Pearce said.

Gold prices showed little reaction to the strong, with April Comex gold futures last trading at $1,946.00, up 0.52% on the day. 

Live 24 hours gold chart [Kitco Inc.]

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