The health of the U.S. jobs market has been a key factor in justifying ongoing rate hikes – but now signs are emerging that there could be a softening in what has so far been robust growth. This is key for gold as many experts believe that the gold bulls are waiting for a reversal in hikes to unleash the yellow metal’s true pricing potential and soar to record new highs.
Earlier this week, Federal Reserve chairman Jerome Powell suggested that strong jobs data was something of a surprise to the Feds following a year of hikes. All indicators are that the central bank still wants to see the job market cooling before it can begin to reserve course.
The first signs that a job market softening could be occurring emerged yesterday (Thursday) with the latest data from the U.S. Labour Department confirming an increase in the number of Americans claiming unemployment benefits for the first time. The data shows that 13,000 workers are newly jobless, taking the total unemployed up to 196,000 workers. This figure was higher than analysts had expected to see, meaning that a sudden and unexpected cooling has taken place.
The number of people continuing to claim unemployment now sits at 1.688 million people, up 38,000 workers from the previous week. Should this trend continue over the next few weeks, it could give the Federal Reserve pause to rethink its policy – should that happen, we can expect gold prices to spike. Don’t wait. Buy now.
