(Kitco News) - The gold market continues to see some solid selling pressure but analysts note that more disappointing labor market data could provide some safe-haven demand for the precious metal after private payrolls processor ADP said that companies hired fewer workers than expected last month.
ADP reported that 62,000 jobs were created in April, significantly missing expectations. Consensus forecasts had projected job gains of 114,000.
“Unease is the word of the day. Employers are trying to reconcile policy and consumer uncertainty with a run of mostly positive economic data,” said Dr. Nela Richardson, chief economist, ADP. “It can be difficult to make hiring decisions in such an environment.”
Although the gold market is seeing some significant selling pressures, prices are well off their lows in initial reaction to the disappointing economic data. Spot gold last traded at $3,283.70 an ounce, down 1% on the day.
Along with disappointing job growth, the report also noted weaker wage inflation. The report said that wages for workers who stayed in their jobs saw their paycheck increase by 4.5% percent in April from a year earlier, a slight deceleration from March.
Meanwhile, for people who switched jobs, their annual pay increased 6.9%, up from March’s 12-month increase of 6.7%.
According to analysts, the disappointing labor market data gives the Federal Reserve to cut interest rates, which should support gold prices.
