(Kitco News) - Gold bulls are attempting to combat the market’s ennui, as disappointing employment data showed a drop in available jobs in the U.S. in July, sparking renewed interest in the precious metal.
Job openings, a measure of labor demand, fell to 7.67 million by the end of July, down from June’s downwardly revised figure of 7.91 million, according to the Labor Department's monthly Job Openings and Labor Turnover Survey (JOLTS) report.
Economists had expected job openings to exceed 8 million, according to consensus estimates.
“On the last business day of July, the number of job openings was little changed at 7.7 million and was down by 1.1 million over the year. The job openings rate, at 4.6 percent, changed little in July,” the report stated.
Job openings have dropped to their lowest level since April 2021, which some economists say is further evidence of a slowing labor market.
Not only has gold managed to hold support above $2,500 an ounce, but it has also seen renewed buying interest following the release of the JOLTS data. December gold futures last traded at $2,524.50 an ounce, remaining roughly unchanged on the day.
Gold is benefiting from the data, which has weakened the U.S. dollar. According to some analysts, the disappointing employment figures are fueling expectations that the Federal Reserve will aggressively cut interest rates later this month.
According to the CME FedWatch Tool, markets see a 49% chance of a 50-basis-point cut on Sept. 18.
“The significant dovish reaction to the report, with equities taking a leg lower, Treasuries rallying sharply across the curve, and the market pricing in a 4-in-10 chance of a 50bp cut in September, provides further evidence of the heightened sensitivity markets have to incoming economic data,” said Michael Brown, Senior Research Analyst at Pepperstone. “The report also raises the stakes for Friday's jobs report, providing additional signs that 'bad news is bad news' at present, with participants more focused on downside growth risks than on the potential for additional policy stimulus.”
