Gold Prices Slips Near 2010 Low After US Jobless Claims Report

Gold Prices Slips Near 2010 Low After US Jobless Claims Report

Jobless claims for the first time have stayed under the 300,000 level for 22 consecutive weeks, which is usually associated with a firming labor market. Image Source:

Prices of gold futures dropped close to the lowest level since 2010 on Thursday after data demonstrated that the number of people who filed for jobless claims in the US rose less than expected last week, holding close to the lowest level since November 1973.

Amid the dollar stabilized and investors expected data on US employment that could strengthen the prospects for the Fed to raise interest rates as soon as next month.

On the Comex Gold futures for December delivery dipped $1.30, or 0.12%, to trade at $1,084.30 a troy ounce. Spot gold was unchanged at $1,084.10 an ounce.

The Department of Labor of the United States said that the number of individuals who filed for unemployment benefits increased by 3,000 last week to 270,000. Analysts had expected initial unemployment claims increased by 6000-273000 last week from the previous week’s total of 267,000.

Jobless claims for the first time have stayed under the 300,000 level for 22 consecutive weeks, which is usually associated with a firming labor market.

The market agents now looked forward to US non-farm payrolls report on Friday, amid ongoing expectations for a rate rise in Sept.. The consensus forecast is that the data showed growth in 223,000 jobs last month, while it is anticipated that the unemployment rate to render them stable at 5.3%.

Wednesday’s data showed that service sector activity in the US increased at its fastest pace since August 2005, in July, while data of private sector jobs rose at the slowest pace in three months.

Strong jobs data from the United States on Friday could send gold under $ 1,080, said Howie Lee, an analyst at Phillip Futures in Singapore.

Hopes that the Fed would hike rates at its next monetary policy meeting in September gained value this week after Atlanta Federal Reserve President Dennis Lockhart said that only a “significant decline” in the US economy would make no support an interest rate hike in the coming month.

But the Fed Gov Jerome Powell said lawmakers had not yet decided whether to raise rates the coming month, adding that the latest jobs data had been mixed.

Holdings of SPDR Gold Trust, fell to 21.47 million ounces on Wednesday, the lowest since September 2008.

The precious metal was trading at five-year lows in the global market, amid gold prices dipped below Rs 25,000, having lost Rs 40 to trade, reaching its lowest in  over four-year at Rs 24,980 per 10 grams (g) at the domestic bullion market.

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