Gold prices under pressure as U.S. weekly jobless claims fall more than expected by 13K
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(Kitco News) - The gold market is seeing some renewed selling pressure as the U.S. labor market remains fairly robust with the number of American workers applying for first-time unemployment claims dropped more than expected last week.
Thursday, the U.S. Labor Department said that weekly jobless claims fell by 13,000 to 216,000, down from the previous week's revised estimate of 228,000 claims.
According to consensus forecasts, economists were expecting to see jobless claims rise at a faster pace to 232,000.
The gold market is losing some altitude in initial reaction to the latest labor market numbers. December gold futures last traded at $1,941.10 an ounce, down 0.16% on the day.
According to some market analysts, the better-than-expected claims data is having an outsized impact on markets as it eases fears of an economic slowdown.
“Coming on the heels of this week's ISM services index, this is a big pushback on the narrative of a weakening US economy,” said Adam Button, chief currency strategist at Forexlive.com.
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 – fell to 229,250, a decrease of 8,500 claims from the previous week's revised average.
Continuing jobless claims, which represent the number of people already receiving benefits, were at 1.679 million during the week ending Aug. 26, falling by 40,000 from the previous week's revised level.
Many economists note that healthy labor market data could force the Federal Reserve to maintain its hawkish bias and keep interest rates elevated longer than expected.
The U.S. central bank has been adamant in recent months that it would need to see growing slack in the labor market before they begin to shift their stance on U.S. monetary policy.