(Kitco NewsGold prices remain under pressure, dropping further below $ 1,700, as Americans found more work than expected in February.
The Bureau of Labor Statistics said on Friday that 379,000 jobs were created last month. Economists had expected to see a job gain of about 197,000.
The gold market was under pressure ahead of the latest employment numbers and lost more ground in the initial reaction. April gold futures traded at $ 1,685.60 an ounce, down roughly 1% on the day.
Not only did the headline data show better-than-expected job growth last month, the report said the unemployment rate also fell, falling to 6.2%, down from January’s reading of 6.3%. Economists had expected the unemployment rate to remain unchanged.
Reviews of January employment data were better than expected as well. Previous employment data was revised to 166,000, up from the initial estimate of 49,000.
It wasn’t just the main number that was driving gold prices down. The report also highlighted silent wage growth. The report said average hourly earnings rose 0.2% last month to $ 30.01. The increase was in line with expectations.
Adam Patton, chief currency strategist at Forexlive.com, noted that bond yields and the US dollar had spiked in the initial reaction to the jobs data. Both factors are negative for gold.
Paul Ashworth, chief US economist at Capital Economics, said the latest employment data bode well for the economy’s recovery.
“With the numbers of COVID cases continuing to drop sharply, and more broad-based financial incentives on the way, and the vaccination program likely to reach critical mass before the middle of the year, the United States is well positioned to recover a significant number of those lost jobs this year, he said in Note to customers.
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