In a nine-day streak of losses, gold futures extended their decline on Thursday, closing down $3 or 0.16% at $1,831.80 per ounce. This drop comes as the United States reported lower-than-expected jobless benefit claims, signaling a robust labor market and raising concerns among investors about the Federal Reserve (Fed) maintaining high interest rates.
The Labor Department revealed that initial unemployment benefit claims increased by a mere 2,000 to reach 207,000 last week, a number below analysts’ projections of 210,000. This data reinforces the notion that the U.S. labor market continues to exhibit strength, prompting apprehensions that the Federal Reserve may opt for a prolonged period of elevated interest rates.
Simultaneously, the SPDR Gold Trust fund, the world’s largest gold exchange-traded fund (ETF), has been steadily reducing its gold holdings, marking its lowest level since August 2019. This move underscores the diminishing appeal of the precious metal as investors seek alternative investment options amid the current economic landscape.
Market watchers are eagerly anticipating the release of the U.S. non-farm employment figures for September, scheduled for release at approximately 7:30 p.m. Thai time. Analysts’ predictions suggest that non-farm employment figures for September are likely to increase by 163,000 jobs, following an addition of 187,000 jobs in August. Additionally, it is anticipated that the unemployment rate for September will decrease from 3.8% in August to 3.7%.
The latest economic indicators have left investors cautious, with gold experiencing sustained pressure in the face of the Federal Reserve’s potential stance on interest rates. As the labor market data continues to reflect strength, the future trajectory of gold and other precious metals remains uncertain, subject to evolving economic conditions and Fed policy decisions.
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Friday, October 6, 2023