Slowing US job growth in June pushes the price of gold higher
Job growth in the United States slowed more than expected in June after a sharp increase in the previous month, which helped gold to continue its gains, after growing doubts about the prospects for raising interest rates again, and the continuation of this after July / July.
Today, Friday, the Labor Department said in its well-watched jobs report that non-farm private sector jobs increased by 209,000 jobs last month. Data for the month of May was revised to show an increase in the number of jobs by 306,000 jobs, down from 339,000 as previously reported.
However, the lack of labor in the market continues, as the ministry confirmed the decline in the unemployment rate from the highest level in seven months, as well as the continuation of relatively large increases in wages.
Average hourly earnings, a key indicator of inflation, rose 0.4% month on month, beating expectations. On a yearly basis, wages increased 4.4%, 0.2% more than forecast.
Economists had expected, in a Reuters poll, an increase in jobs of 225,000 jobs.
The economy needs to create 70,000 to 100,000 jobs per month to keep pace with the increase in the working-age population in the United States.
The unemployment rate fell to 3.6% from 3.7% in May, again close to its lowest level in nearly half a century.
By 13:13 GMT, spot gold rose 0.4% to $1918.62 an ounce, and US gold futures rose 0.5%, to $1924.30.
Gold prices were boosted by the decline in US Treasury yields and the fall of the dollar after the data was released.
Gold is strongly affected by raising US interest rates, as this leads to an increase in the opportunity cost of possessing the precious metal that does not yield a return.
Earlier this week, minutes from the Fed’s latest meeting showed a split among monetary policymakers over the decision to pause interest rate increases. Expectations indicate that interest rates will be raised by twenty-five basis points at the next meeting, which will be held on the 25-26 of this month.
As for other precious metals, there was little change in silver, to settle at $22.75 an ounce, while platinum rose 0.2% to $903.16. Palladium lost 0.4%, recording $1,237.05.
(Reuters, The New Arab)
2023-07-07 15:38:05
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