(Kitco News) - The gold market continues to consolidate near the lower end of its recent range, holding support above $4,000 an ounce even as the U.S. labor market remains fairly resilient, with the number of people filing first-time unemployment claims staying below a key threshold.
Initial claims for state unemployment benefits rose by 9,000 to a seasonally adjusted 197,000 for the week ending July 25, the Labor Department announced Thursday. The figure came in slightly below expectations, as consensus forecasts called for 201,000 claims. The previous week's reading was revised higher by 1,000 to 188,000.
Spot gold has traded in a narrow range for most of the week and is seeing little reaction to the latest employment data. Spot gold last traded at $4,077.20 an ounce, up 0.30% on the day.
Economists note that the U.S. labor market remains an important pillar of support for an otherwise fragile economy. At the same time, data released Thursday showed that the U.S. economy grew at an annualized rate of 1.5% in the second quarter. Economists had expected gross domestic product to expand by 2.1%.
Although economic growth was weaker than expected, economists said a relatively stable labor market should continue to support consumer spending and the broader economy.
For the gold market, however, the latest labor data could prove to be a headwind. Analysts note that a resilient labor market gives the Federal Reserve room to remain focused on the inflation side of its dual mandate.
The Federal Reserve has reinforced its tightening bias as the global energy crisis, fueled by the Iran war, continues to stoke inflation concerns. Although the central bank left interest rates unchanged at Wednesday's monetary policy meeting, its statement showed that three committee members voted in favor of a 25-basis-point rate hike.
