(Kitco News) - The gold market is seeing some renewed bullish momentum, trading near session highs as momentum in the U.S. labor market cools, with the number of job openings falling more than expected.
Job openings, a measure of labor demand, dropped to 8.49 million as of the last day of March, the Labor Department said in its monthly Job Openings and Labor Turnover Survey, or JOLTS report, on Wednesday. The number of job openings has dropped by 1.1 million over the year.
The data was weaker than expected as consensus estimates looked for the number of jobs available to be around 8.68 million.
The number of jobs available has dropped to its lowest level since February 2021.
The weaker employment data is breathing some life into gold as prices have bounced off critical support. June gold futures last traded at $2,319.10 an ounce, up 0.66% on the day.
The report said that the number of separations decreased to 5.2 million with the number of quits little changed at 3.3 million and layoffs and discharges at 1.5 million.
Economists have noted that the latest JOLTS report highlights some weakness in the labor market.
The Federal Reserve has been paying more attention to the JOLTS report as it is a leading indicator of tightness or slack in the labor market, potentially impacting wage inflation.
"Overall, the fall in the job openings suggests a weaker employment picture. There has been some uncertainty regarding this release. Are companies inflating their job openings in order to keep the pipeline open for essential workers," said Greg Michalowski, currency analyst at Forexlive.com. "Regarding the quits rate, its decline is also a tilt to a softer jobs picture."
Olivia Cross, North America Economist at Capital Economics, said while the labor market still remains tight, the Fed has room to ease rates this year.
“The March JOLTS data showed clearer signs that labour market tightness is continuing to ease. Slower downward progress in wage growth could be concerning, but for now it still appears to be moving broadly in line with the forward-looking indicators, which point to a further easing ahead,” Cross said in a note.
