Can gold attract more investment demand if U.S. labor market stabilizes?
NEW YORK (September 30) Despite some overnight volatility, the gold market continues to hold solid gains above $3,800 an ounce, even as the U.S. labor market shows signs of stabilizing, with the number of available jobs holding steady after the previous month’s sharp drop.
August job openings—a measure of labor demand—rose to 7.23 million, up from July’s reading of 7.21 million, according to the Labor Department's monthly Job Openings and Labor Turnover Survey (JOLTS). The data was roughly in line with consensus forecasts, as economists had expected a slight decrease to 7.19 million.
The gold market is not seeing any significant reaction to the benign employment data. Instead, renewed volatility has emerged as investors took some profits after prices reached overnight highs of $3,870 an ounce.
Although the number of job openings remains at depressed levels, some analysts have warned that the market may need to see further weakness in the labor sector to spark a sustained move toward $4,000 an ounce.
The report noted that last month, hires and separations were both unchanged at 5.1 million. Within separations, quits came in at 3.1 million, while layoffs and discharges were 1.7 million—both little changed from July.
Although the Federal Reserve has restarted its easing cycle, some analysts have said it is unlikely to aggressively cut interest rates if the labor market shows signs of stabilization.
This could also be the last government report investors see for a while, as Congress has been unable to pass funding legislation to keep the government open beyond today.
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