Gold prices largely ignore stable labor market data as U.S. weekly jobless claims rise to 204K

WASHINGTON (September 28) The gold market is ignoring stable labor market data as it sees some modest technical bargain hunting after Wednesday’s drop to a 6.5 month low.

Thursday, the U.S. Labor Department said that weekly jobless claims increased by 2,000 to 204,000 during the week ending Sept. 23, up from the previous week's revised estimate of 202,000 claims.

The latest labor market data was better than expected. According to consensus forecasts, economists were expecting to see jobless claims rise to 214,000.

The gold market is not seeing much reaction to the latest economic data. December gold futures last traded at $1,896.30 an ounce, up 0.26% on the day. According to some analysts the gold market is attracting some technical buying after prices dropped to their lowest level since March on Wednesday.

The latest U.S. labor market data does not bode well for gold as it continues to support the Federal Reserve’s aggressive monetary policies, which has pushed bond yields to fresh 16-year highs above 4.5%.

Last week, Federal Reserve Chair Jerome Powell was fairly clear that the central bank needs to see some cooling in the labor market, as a sign that inflation is under control, before it shifts its current monetary policy stance.

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 – fell to 211,000, an a decline of 6,250 claims from the previous week's revised average of 217,250.

Continuing jobless claims, which represent the number of people already receiving benefits, were at 1.67 million during the week ending Sept. 12, rising by 12,000 from the previous week's revised level of 1.658 million.

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