(Kitco News) - The gold market is seeing solid selling pressure and could continue to struggle, as the U.S. labor market remains robust and the private sector created more jobs than expected last month, according to payroll processor ADP.
On Wednesday ADP said that 143,000 jobs were created last month. The report handily beat expectations, as consensus forecasts called for job gains of 124,000.
“Job creation showed a widespread rebound after a five-month slowdown. Only one sector, information, lost jobs. Manufacturing added jobs for the first time since April,” the report said.
The gold market was already seeing some technical selling pressure ahead of the employment data and remains near session lows in initial reaction to positive labor market numbers. December gold futures last traded at $2,669.30 an ounce, down 0.78% on the day.
While the U.S. economy continues to create jobs, the report noted that wages inflation remains relatively in check.
““Stronger hiring didn't require stronger pay growth last month,” said Nela Richardson, chief economist, ADP. “Typically, workers who change jobs see faster pay growth. But their premium over job-stayers shrank to 1.9 percent, matching a low we last saw in January.”
The report said that workers who stayed in their jobs last month saw their annual wages increase 4.3%, down slightly from the previous month. At the same time, workers who changed jobs last month saw their wages increase 6.6%, down sharply from the 7.3% increase seen in August.
Economists have said that the positive employment growth coupled with falling wage pressures gives the Federal Reserve to slowly ease interest rates, in line with recent comments from Fed Chair Jerome Powell.
However, markets continue to price in another potential 50 basis point cut next month.
