(Kitco News) - The gold market is rallying following the release of worse-than-expected labor market data after the number of Americans filing new claims for unemployment benefits increased last week.
Initial claims for state unemployment benefits rose to a seasonally adjusted 219,000 for the week ending May 25, the Labor Department announced on Thursday. According to consensus estimates, economists forecasted a reading of 218,000 claims. The previous week’s figure was revised upward by 1,000 to 216,000.
The gold market is rallying on the labor market data, with spot gold last trading at $2,343.81 an ounce, up 0.25% on the day.
Meanwhile, 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 222,500, up from the previous week's revised average of 220,000.
Continuing jobless claims, which represent the number of people already receiving benefits, were at 1.791 million during the week ending May 18, up from the previous week’s revised 1.787 million level.
Markets are paying close attention to the labor market, which remains a critical factor for the Federal Reserve’s monetary policy. Economists note that a tight labor market will increase wage inflation, adding to broadly higher consumer prices.
