Gold Prices Jump After U.S. Created 20K Jobs In February – Kitco News

Gold Prices Jump After U.S. Created 20K Jobs In February – Kitco News

(Kitco News) – Gold prices are pushing higher as the U.S. economy created fewer jobs than expected in February.

Friday, The Bureau of Labor Statistics said 20,000 jobs were created in February; economists were expecting to see job gains of around 180,000.

At the same time the unemployment rate came in at 3.8%, down from January’s level. Economists were expecting to see the rate fall a tick lower to 3.9%. The drop in the unemployment rate came as the participation rate held relatively steady at 63.2%.

While the headline data was significantly weaker than expected the report noted better revision to employment in December and January. December’s data were revised up to 227,000 from the previous estimate of 222,000; meanwhile, January was revised up to 311,000 from the initial estimate of 304,000.

Gold prices were holding on to modest gains ahead of the data and have pushed higher in initial reaction. April gold futures last traded at $1,297.50 an ounce, up 0.87% on the day. Traders and investors will be keeping their eye on the psychological level at $1,300 an ounce.

In other positive news for the gold market, wage inflation is pushing higher. Wages increased by 11 cents or 0.4% last month. Economists were expecting to see an increase of 0.3%. For the year, wages increased by 3.4%.

Although wages inflation is rising, economists are not expecting the latest data to have much impact on the Federal Reserve as the central bank has said it is comfortable with inflation pushing over 2%.

Andrew Grantham, senior economist at CIBC Capital Markets, said that February’s disappointing jobs report creates some risk for a drop in consumer spending. However, he added that it might not have much impact on Federal Reserve interest rate expectations.

“Given the recent volatility in the data the Fed will likely discount this as a one-off and only begin to worry if we see some more weaker results in the months ahead,” he said. “The US dollar will likely trade lower and short-term yields could fall on the back of the large jobs surprise.”

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.


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