(Kitco News) - While still under pressure, gold prices have bounced off their session lows as the U.S. labor market appears to be losing momentum as the number of workers applying for first-time unemployment benefits jumps.
Thursday, the U.S. Labor Department said that weekly jobless claims increased by 9,000 to 224,000 during the week ending Jan 27, up from the previous week's revised estimate of 215,000 claims.
The number was higher than the consensus forecast, as economists were expecting to see jobless claims hold relatively steady at around 213,000.
The gold market is seeing some modest buying in its initial reaction to the disappointing weekly labor data. Spot gold prices last traded at $2,038.60 an ounce, roughly unchanged 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 207,750, up from the previous week's revised average of 202,500.
The report also noted that workers already receiving benefits are finding it difficult to find new employment.
Continuing jobless claims, which represent the number of people already receiving benefits, increased to 1.898 million during the week ending Jan. 20, up by 70,000 claims above the previous week's revised level of 1.806 million.
. The advance number for seasonally adjusted insured unemployment during the week ending January 20 was 1,898,000, an increase of 70,000 from the previous week's revised level of 1.828 million.
Economists continued to pay close attention to the U.S. labor market as it continues to be a key factor regarding the Federal Reserve’s monetary policy decision.
Although the U.S. central bank is looking to ease interest rates later this year, it has pushed back on expectations of a March rate cut.
“The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent,” The Federal Reserve said Wednesday in its monetary policy statement.