Gold prices rose slightly today, ending a three-day decline. Support for precious metals have data on the US labor market, which indicated a significant increase in the number of initial applications for unemployment benefits.
US Department of Labor said the seasonally adjusted number of initial applications for unemployment benefits in the week ended April 30 rose by 17 000 to 274 000 (a five-week high). the last increase in rates were the highest in more than a year. Economists had expected the number of calls will increase only up to 260,000 from 257,000 the previous week. It is worth emphasizing the number of calls is less than 300 000 for 61 consecutive weeks, which is the longest series since 1973. Meanwhile, it became known that the moving average for 4 weeks, which smooths the volatile weekly data, rose by 2000 to 258 000. Meanwhile, the number of people who continue to receive unemployment benefits fell by 8,000 to 2.121 million . for the week ended April 23. The last reading was the lowest since November 2000.
In the course of trading is also affected by the expectations of tomorrow’s publication of a report on employment in the agricultural sector, which is a key barometer of the health of the US economy. “A weaker employment report could push gold prices above $ 1,300,” – said an analyst at ABN Amro Georgette Boele. It is expected that the number of employees increased by 202 thousand. After increasing by 215 thousand. In April. The unemployment rate is likely to remain at around 5.1%. If the forecasts are correct, it will be an additional argument for the Fed in favor of a gradual tightening of monetary policy. The increase in rates, in turn, would contribute to the growth of the dollar and have reduced the demand for gold. It is worth emphasizing the gradual increase in rates carries less of a threat to the gold price than a series of sharp climbs.
“Gold is likely to remain in the current range between $ 1,250 and $ 1,300 before the end of the quarter, when we have more clarity on the further increase of the Fed’s rate” – the analyst Natixis Dadhad Bernard said.
In general, investor interest in gold remains stable. Gold reserves in the largest investment fund SPDR Gold Trust rose on Wednesday by 0.07 percent, to 825.54 tonnes (the highest value in more than two years).
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