Gold up 1% after US jobs data: 5 reasons behind yellow metal’s appeal in 2024

Gold prices climbed 1% on Thursday after fresh data from the Labor Department indicated that the number of Americans filing new unemployment claims rose more than expected last week, reinforcing bets that the Federal Reserve will reduce interest rates later in the year.

Spot gold rose 0.95% to $2,330.51 per ounce by 1414 GMT. U.S. gold futures for June delivery rose 0.74% to $2,339.40 per ounce.

The U.S. dollar index fell 0.17% to 105.363.

Initial claims for state unemployment benefits increased 22,000 to a seasonally adjusted 231,000 for the week ended May 4, the Labor Department reported on Thursday, compared to the 215,000 claims that economists polled by Reuters had forecast in the latest week.

The dollar slipped against its rivals following the jobs report, making gold less expensive for other currency holders. 

“What we’re seeing is continued impact from the expectations for Fed rate cuts, or when those rate cuts may occur,” said David Meger, director of alternative investments and trading at High Ridge Futures.

The latest data indicates a slight weakening in the jobs market, bolstering expectations that Fed interest rate cuts may happen sooner than previously expected, which supports markets like gold and silver, he added.

Lower interest rates reduce the opportunity cost of holding bullion. Traders are currently pricing in about a 67% chance of a Fed rate cut in September, according to the CME’s FedWatch Tool.

“The miss in the U.S. jobs data… gave gold some strength here, and some safety buying this morning,” said Bob Haberkorn, senior market strategist at RJO Futures.

Looking ahead, investor attention will shift to consumer price index data scheduled to be released next week.

Spot silver rose 2.9% to $28.136 per ounce, and spot platinum rose about 1.1% to $982.25 per ounce. Spot Palladium rose 1.6% to $967.28 per ounce.

(Reporting by Kavya Balaraman, Editing by Franklin Paul)

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it’s all here, just a click away! Login Now!

Catch all the Commodity News and Updates on Live Mint.
Download The Mint News App to get Daily Market Updates & Live Business News.


Published: 09 May 2024, 10:58 PM IST

Source link


Leave a Reply

Your email address will not be published. Required fields are marked *

Next Post

Stocks, Bonds Gain After $25 Billion Treasury Sale: Markets Wrap

Thu May 9 , 2024
Equities rose as a jump in jobless claims reinforced bets on Fed policy easing — and extended gains after a $25 billion sale of 30-year bonds saw decent demand. The S&P 500 topped 5,200 — though trading volume was 20% below the average of the past 30 days. Gains in […]

You May Like