Gold prices continue to consolidate as U.S. weekly jobless claims remain elevated

NEW YORK (June 18) Gold prices continue to consolidate below $3,400 an ounce and remain unable to attract new bullish momentum, even as the number of American workers applying for first-time unemployment benefits remains elevated.

Initial claims for state unemployment benefits fell by 5,000 to a seasonally adjusted 245,000 for the week ending June 14, the Labor Department announced on Thursday. This figure was in line with consensus estimates. The previous week’s number was revised up by 2,000 to 250,000.

Despite the decline, jobless claims remain at their highest level since early October.

Gold prices have been consolidating within a narrow range as investors adjust to last week’s failed breakout above $3,400 an ounce, which was triggered by geopolitical tensions in the Middle East. So far, the conflict between Israel and Iran remains contained within the region, reducing gold’s safe-haven appeal. Spot gold last traded at $3,387.79 an ounce, roughly flat on the day.

Although initial claims declined last week, the four-week moving average—which smooths out weekly volatility—rose sharply to 245,500, an increase of 4,750 from the previous week’s revised average.

“This is the highest level for this average since August 19, 2023, when it was 246,000,” the report stated.

Adding to the gloomy labor outlook, unemployed workers are finding it increasingly difficult to reenter the job market. Continuing jobless claims, which track the number of individuals already receiving benefits, fell slightly to 1.945 million for the week ending June 7, a decrease of only 6,000 from the previous week’s revised level of 1.951 million.

Although gold is struggling to gain traction, some analysts suggest that weak employment data could ultimately prove bullish over the longer term. A softening labor market is expected to prompt the Federal Reserve to shift from its neutral monetary policy stance and signal rate cuts later this year.

The central bank is expected to leave interest rates unchanged later this afternoon; however, markets will be closely watching the updated economic projections, which will be published alongside the policy statement.

KitcoNews