FX168 Financial News (North America) News The number of jobless claims in the US fell at the beginning of last week, indicating a potentially strong momentum in the job market. After the data was released, spot gold once fell below the $2,380 mark.
On Thursday (May 16), data released by the US Department of Labor showed that the number of initial jobless claims in the US for the week ending May 11 was 222,000. Last week, the data rose to its highest level in more than eight months, and this week's slight decline reversed part of last week's increase. The increase in initial jobless claims this week is due in large part to a surge in the number of jobless claims in New York related to school spring break. Although the US labor market is still healthy, the labor market is steadily being rebalanced after the Federal Reserve raised interest rates by 525 basis points since March 2022. The easing of labor market conditions and a return to a downward trend in inflation raised the possibility of interest rate cuts in September.
Market reaction
Spot gold declined after the initial request data was released. At one point, it fell below 2380. It is now reported at 2382.01 US dollars/ounce, down 0.14% during the day.
(Source of the 30-minute trend chart of spot gold: FX168)
Gold prices hovered near a one-month high on Thursday, as signs of stabilizing US inflation increased the possibility that the Federal Reserve would cut interest rates as early as September.
Ole Hansen (Ole Hansen), head of commodity strategy at Saxo Bank, said: “Stable inflation combined with weak other economic data such as retail sales is really a great cocktail for gold and silver.”
Retail sales in the US were surprisingly flat last month, while cooling consumer prices and last week's sluggish labor market data are good news for Federal Reserve policymakers, who are waiting to see new progress in inflation before cutting interest rates.
Lower interest rates have increased the appeal of unprofitable gold.
Hanson said, “Gold has gone through a period of consolidation, but compared to the sharp rise in March and April, the consolidation was very small... so this really shows that the market is still potentially strong.”
Meanwhile, spot silver fell 0.3% to $29.61 an ounce, hitting its highest level since February 2021 earlier in the session.
ANZ analysts wrote in a report: “Strong fundamentals during a period of rising gold prices may stimulate investors' interest in silver.” They added that they expect silver to trade above $31 by the end of 2024.
Palladium fell 0.3% to $1,007.10, while platinum rose 0.2% to $1,066.30, after hitting a one-year high.
Hanson said predictions of continued deficits and strong car demand are driving platinum up and attracting power buyers.
Platinum has risen 7% so far this week.