Gold prices under pressure as U.S. weekly jobless claims drop below 200K

New York (Dec 31)  The gold market is struggling to hold on to $1,800 an ounce as the U.S. labor market continues to improve as fewer than 200,000 workers applied for first time unemployment benefits.

Thursday, the U.S. Labor Department said that weekly jobless claims fell by 8,000 to 198,000, down from the previous week's revised estimate of 205,000 claims.

The latest labor market data slightly beat expectations. According to consensus forecasts, economists were expecting to see jobless claims hold steady around 200,000

The gold market is taking the latest labor market data in stride as it faces ongoing selling pressure. Spot gold futures last traded at $1,799.80 an ounce, down 0.28% on the day.

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 199,250, down by 7,250 claims from the previous week.

“This is the lowest level for this average since October 25, 1969 when it was 199,250,” the report said.

Continuing jobless claims, which represent the number of people already receiving benefits, were at 1.716 million during the week ending Dec.18, falling by 140,000 from the previous week's revised level.

According to some economists, the latest jobless claims numbers will give the Federal Reserve more confidence to quicken the pace to reduce its monthly bond purchases and tighten monetary policy sooner than expected.

“This is the lowest level for insured unemployment since March 7, 2020 when it was 1,715,000,” the report said.

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