(Kitco News) - Growing weakness in the U.S. labor market, as more American workers than expected apply for first-time unemployment benefits, appears to be adding to gold’s technical bullish momentum.
Thursday, the U.S. Labor Department said that weekly jobless claims rose by 21,000 to 218,000, up from the previous week's revised estimate of 197,000 claims.
The latest labor market data missed expectations. According to consensus forecasts, economists were expecting to see jobless claims hold steady around 200,000.
The U.S. labor market has seen a steady loss of momentum for the past month as initial jobless claims missed expectations five out of the last six weeks. Initial claims have risen to their highest level since late-March.
The gold market appears to be benefitting from the disappointing economic data as prices push past a critical initial resistance point. June gold futures last traded at $1,837.10 an ounce, up more than 1% 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 to 199,500, up by 8,250 claims from the previous week's revised average.
Continuing jobless claims, which represent the number of people already receiving benefits, were at 1.317 million during the week ending May 7, falling by 25,000 from the previous week's revised level.
“This is the lowest level for insured unemployment since December 27, 1969 when it was 1,304,000,” the report said.
