Before the US market on Thursday (November 9th), gold rose. Due to the seventh consecutive week of increase in the number of Americans applying for unemployment benefits, it further proves that the labor market is cooling down.
As of press release, spot gold has risen nearly $5 in the short term and is currently trading at $1950.60 per ounce.
According to released data, as of the week ending October 28th, the number of people applying for unemployment benefits has increased to 1.83 million, the highest level since mid April. As of the week ending November 4th, the number of initial applicants for unemployment benefits recorded 217000. The recent increase in the number of people applying for unemployment benefits indicates that it is becoming increasingly difficult for unemployed people to find new jobs. The demand for workers is falling from unprecedented pandemic levels, and the unemployment rate is currently at its highest level in nearly two years. Economists predict that the labor market will gradually cool in the future, which has led to increased anxiety among workers. Due to current interest rates being at their highest level in more than 20 years, some employers are starting to scale back their recruitment plans, while others are laying off employees across the board.
The number of initial claims for unemployment benefits in the United States last week remained basically unchanged from previous data, recording 217000. The four week average is rising, but still far below the level seen in summer. Therefore, it is expected that there will not be too much reaction in the market. Since the release of a series of data last week, there has been talk of a gradual slowdown in the job market.
Due to the cooling of safe haven demand, gold has been continuously declining in recent days, and the focus has shifted to the speech of Federal Reserve Chairman Powell, with traders looking for interest rate clues.
Gold prices have fallen by over $50 since hitting the $2000 level last week.
Han Tan, chief market analyst at Exinity, said, "The market continues to unwind the war premium of this traditional safe haven asset
He added: "Precious metals cannot take advantage of the decline in the yield of US treasury bond bonds, and the elasticity of the US dollar will certainly not help the cause of gold price bulls."
The US dollar index rose 0.1%, making metals denominated in US dollars less attractive to holders of other currencies. The yield of benchmark 10-year treasury bond bonds hovered near a two-week low.
Several Fed officials who spoke this week maintained a balanced tone regarding the Fed's next decision, but pointed out that they will focus on the impact of economic data and rising long-term bond yields.
Powell did not comment on monetary policy or economic prospects in his prepared speech at Wednesday's meeting. He plans to give a speech at another meeting on Thursday at 02:00 Eastern Time.
Matt Simpson, senior analyst at City Index, said: "He (Powell) may try to maintain a long-term high narrative because admitting to the market that the possible upcoming interest rate cut is not in their interest
According to the Chishang Exchange's FedWatch tool, investors expect an 85% chance that the Federal Reserve will keep interest rates unchanged at its December meeting, and a 70% chance of a rate cut as early as June next year.
The lower interest rates enhance the attractiveness of zero return gold.
