Intchains Group Ltd V.ICG

Gold prices Push Higher !

[Marine2]

Gold prices Push Higher As Only 98K Jobs Created In March

Christensen

Friday April 07, 2017 08:33

Kitco News

Share this article:

(Kitco News) - Following strong gains over ngiht gold prices have pushed to new five-month highs following a much weaker-than-expected jobs report.

Friday, The Bureau of Labor Statistics said 98,000 jobs were created in March, economists were expecting to see job gains of 174,000; however, expectations were raised even higher following strong gains in private-sector employment, according to a report from private-payrolls company ADP, released earlier in the week.

According to reports, this is the weakest pace of job growth since May 2016.

Not only was the headline number in employment weaker than expected but the bureau also downgraded previous months data. January employment was revised down to 216,000 jobs, following the previous estimate at 238,000; at the same time February numbers were revised down to 219,000 from 235,000 jobs. On average, the U.S. economy has created 178,000 jobs in the last three months.

Despite the weak jobs growth last month, the U.S. unemployment rate dropped to 4.5%, down from the previous level of 4.7%. Economists were expecting to see an unchanged reading.

June gold futures last traded at $1,269.30 an ounce, up more than 1% on the day. Gold prices are now at their highest level since Nov. 11.

Positive for the gold market, because of its inflation implications, wages continued to show robust growth. Average hourly earnings increased 0.2% last month, increase by 5 cents to $26.14, this follows a 7-cent increase in February. Wages have increased 2.7% in the last 12 months.

Some economists has shrugged off the disappointing employment numbers, saying that this could just be "noise" in a strengthening labor market. Royce Mendes, senior economist at CIBC World Markets noted that the three-month average still shows positive gains.

"While the soft number will have a market reaction, the average of gain in 2017 still remains solid and even this month's number is enough to keep pace with population growth," he siad.

By Neils Christensen

For Kitco News