Source: Jin10 Data
Despite the good news from the US labor market, there seems to be a pervasive sentiment of "selling everything" in the market.
Data released on Tuesday showed that job vacancies in the US in April fell to the lowest level in more than three years, consistent with the trend of the labor market gradually slowing down.
Employment vacancy and labor turnover survey (JOLTS) released by the US Bureau of Labor Statistics on Tuesday showed that job vacancies in April fell from 83.6 million in the previous month to 8.059 million, lower than market expectations.
After the data was released, spot gold rebounded above $2,330, but then gave up all gains and briefly fell below the $2,320 level; spot silver plunged 4% during the day, falling below $30; the US dollar index continued to maintain above the 104 level.
The decline in job vacancy data is quite widespread, with healthcare and government departments experiencing the largest decline. Vacancies in the accommodation and catering services industry have also decreased, which may reflect California's increased minimum wage requirements.
Recent data shows that the US labor market is cooling down, but this is gradually being achieved by slowing down recruitment rather than direct layoffs. Federal Reserve officials hope this trend will continue to control demand and curb inflation, while not letting millions of people lose their jobs.
"Fed megaphone" Nick Timiraos pointed out that the data shows that the imbalance in the US labor market continues to ease, and job vacancies fell below 8.1 million in April, with job vacancies to unemployment ratio falling to 1.24, reaching the level of October 2019.
After the data was released, the Fed rate drop showed that the Fed's rate-cutting pace in 2024 accelerated; the CME's Fed observation tool showed that the probability of a rate cut in September was 54.9%.
However, there was a pervasive "sell everything" sentiment in the market on Tuesday, with precious metals leading the decline.
John Reade, chief market strategist at the World Gold Council, said that a Fed rate cut could bring Western investors back to gold. High interest rates have damaged European and American investors' interest in gold, even though gold prices have remained strong with the help of central bank purchases (mainly from emerging markets). Reade said that a recent risk is a profit-taking in precious metals, which may occur after strong US economic data.
For silver, Forexlive analysts cautioned, "We should note that historically, June has been the worst-performing month for silver in the past 20 years."
Next, investors will continue to pay attention to the ADP employment report to be released on Wednesday and the US non-farm data to be released on Friday.
Deutsche Bank pointed out that if the US unemployment rate meets the general expectation of 3.9% in May, the non-farm employment report on Friday may set a new milestone.
Deutsche Bank's Jim Reid said this is because it will be the longest time since the US unemployment rate has remained below 4% since the early 1950s. Reid wrote in a report, "Currently, the situation of unemployment rates below 4% has been going on for 27 months, almost approaching the record set in the late 1960s."
The situation of US unemployment rates being below 4% has lasted for 27 months, while it was 35 months in the 1950s. Reid said that as expected, Deutsche Bank also predicts that the unemployment rate in May will be 3.9%.
Editor / jayden