Gold prices see technical selling, ignoring U.S. weekly jobless dropping to 190K
(Kitco News) - The gold market is seeing some technical profit taking as precious metals investors largely ignore further strength in the U.S. labor market.
Thursday, the U.S. Labor Department said that weekly jobless claims fell by 2,000 to 190,000, down from the previous week's unrevised estimate of 192,000 claims.
The latest labor market data solidly beat economist expectations as consensus estimates were looking for claims to rise by 196,000.
The gold market is not seeing much reaction to economic data as prices remain on the backfoot. April gold futures last traded at $1,837.10 an ounce, down 0.45% on the day.
The four-week moving average for new claims – often viewed as a more reliable measure of the labor market since it flattens week-to-week volatility – rose, by 1,750 claims to 193.00.
Continuing jobless claims, which represent the number of people already receiving benefits, were at s 1.655 million during the week ending Feb. 18, falling by 5,000 from the previous week's revised level.
According to some analysts, the latest weekly jobless claims data will continue to ease fears that the U.S. economy is headed towards an imminent recession. However, the data is not good for anyone who is expecting the Federal Reserve to end its tightening cycle in the first half of this year.
The U.S. central bank has remained committed to its view that it will need to see a weaker labor market before it looks to adjust its aggressive monetary policy stance.
There has been a solid shift in the marketplace as investors start to anticipate that the Federal Reserve will continue to raise interest rates this year and maintain their aggressive stance longer than expected. Some economists are saying that the Fed Funds rates could move to 6% this year.
The gold market has struggled as these shifting expectations push bond yields higher. Last month the gold market saw its worst performance since mid-2021 because of rising bond yields. The precious metal’s lackluster performance in February came after it saw the best start to the year in a decade.