Gold prices down but see little reaction to mixed US nonfarm payrolls

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(Kitco News) – The gold market has been hit with some strong selling pressure but is seeing little reaction to mixed US labor market data.

On Friday, the Bureau of Labor Statistics said 431,000 jobs were created in March. The data missed expectations economists were forecasting job gains of around 492,000.

Meanwhile, the unemployment rating continued to fall, dropping to 3.6%, down from February’s reading of 3.8%. Economists were looking for the rate to fall to 3.7%.

The gold market was down 1% on the day ahead of jobs report and has remained under pressure in initial reaction. June gold futures last traded at $1,927.70 an ounce, down 1.10% on the day.

Positive for gold, wage pressures continue to rise, adding to the growing inflationary environment. The report said that average hourly wage increased by 13 cents or 0.4% in March to $31.73. The report said that in the past year wages have increased 5.6%.

Although the headline employment number missed expectations, the report showed strong revision for both January and February. January’s employment numbers were revised to 504,000 jobs, up from the previous estimate at 481,000. At the same time February’s data was revised up to 750,000 jobs, compared to the initial estimate of 678,000.

Economists and market analysts are sad that the latest report shows healthy growth in the US labor market.

“There are no big surprises in this report. The jobs market remains strong and if you factor in the revision this is yet-another beat. Wage growth continues and people are being drawn back into the labor force,” said Adam Button, chief currency strategist at Forexlive.com.

Katherine Judge, senior economist at CIBC, described the latest employment report as “solid,” and will add further support to the Federal Reserve’s aggressive plans to raise interest rates.

“Overall, this report is on the firmer side judging from the wages and unemployment figures, and is consistent with expectations for a 50bps hike at the next FOMC,” she said.

Recession and stagflation fears have been steadily rising through March, exacerbated by Russia’s ongoing invasion of Ukraine; however, economists and market analysts have said a recession in the US remains unlikely as the US labor market continues to expand.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/or damages arising from the use of this publication.

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