(Kitco News) – The gold market is holding on to modest gains even as the price sees little reaction to rising volatility in the U.S. labor market as more American workers than expected applied for first-time unemployment benefits last week.
Thursday the U.S. Labor Department said that weekly jobless claims fell by 19,000 to 793,000, down from the previous week’s upwardly revised estimate of 812,000 claims.
Despite the decline, the latest labor market data missed economists’ estimates as consensus forecasts called for initial claims to be round 755,000. The rise in jobless claims due to revised estimates ends three weeks of consecutive declines.
The gold market is seeing little reaction to the latest economic report as it continues to hover below critical resistance around $1,850 an ounce. April gold futures last traded at $1,844.10 an ounce, up 0.08% 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 823,000, down by 33,500 claims from the previous week.
Continuing jobless claims, which represent the number of people already receiving benefits, were at 4.545 million during the week ending Jan. 30, down by 145,000 from the previous week.
Wednesday, in a speech at the Economic Club of New York, Powell highlighted the ongoing issues in the U.S. labor market as the U.S. economy continues to feels the devastating effects of the COVID-19 pandemic.
Although the U.S. unemployment rate has fallen sharply from more than 14% to 6.3% last month, Powell noted that this statistic is not capturing the full impact the pandemic has had on American workers.
“The pandemic has led to the largest 12-month decline in labor force participation since at least 1948. Fear of the virus and the disappearance of employment opportunities in the sectors most affected by it, such as restaurants, hotels, and entertainment venues, have led many to withdraw from the workforce,” he said in his statement.
Due to the ongoing weakness in the labor market, Powell reiterated the central bank’s stance that monetary policy will remain extremely accommodative for the foreseeable future.