(Kitco News) - The gold market remains in striking distance of $3,400 an ounce as the U.S. labor market continues to lose momentum.
Initial claims for state unemployment benefits rose by 8,000 claims to a seasonally adjusted 247,000 for the week ending May 31, the Labor Department announced on Thursday. The number was higher than expectations, as consensus estimates forecasted a reading of 236,000 claims. The previous week’s figure was revised down by 1,000 claims to 239,000.
The gold market continues to see solid investment demand as labor market data this week has been consistently disappointing. Spot gold last traded at $3,398.70 an ounce, up 0.78% 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 235,000, up from the previous week's revised average of 230,500.
Continuing jobless claims, which represent the number of people already receiving benefits, were at 1.904 million during the week ending May 24, down slightly from the previous week’s downwardly revised level of 1.907 million.
Investors have been sensitive to this week’s labor market data as it remains a key factor in the Federal Reserve’s monetary policy decision. The central bank has said it is in no rush to cut interest rates as inflation risks remain elevated and the labor market remains relatively stable.
While the jobs market is losing momentum, some economists aren’t convinced that the Fed will shift away from its neutral stance when it meets later this month.
