Gold prices jump to session highs as JOLTS shows job openings fall to 8.8 million

Source: Kitco News

By: Neils Christensen

Date: Aug 29, 2023

The gold market is seeing some buying momentum as the U.S. labor market shows signs of cooling.

Job openings, a measure of labor demand, dropped to 8.8 million on the last day of July, the Labor Department said in its monthly Job Openings and Labor Turnover Survey, or JOLTS report, on Tuesday.

According to consensus estimates, economists were looking for job openings to drop to 9.49. At the same time, June’s data was revised substantially lower to 9.16 million job openings.

The gold market has jumped above critical resistance at $1,950 an ounce in initial rection to the weaker-than-expected labor market data. December gold futures last traded at $1,957.10 an ounce, up 0.54% on the day.

The report said that the number of hires and total separations were little changed in July coming in at 5.8 million and 5.5 million respectively. The report also noted that the number of people quitting fell to 3.5 million; at the same time the layoffs and discharges were little changed at 1.6 million.

Analysts have been watching job openings carefully as they are seen as a leading indicator for weakness in the labor market. The Federal Reserve has said that it would need to see slack in the labor market as a condition of ending its current tightening cycle.

Craig Erlam,senior UK market analyst at OANDA noted that job openings have fallen to 2021 levels and are close to pre-pandemic levels.

“Further softness over the next few months looks very plausible which could contribute to a cooler labor market and sustainably lower wage growth,” he said.

Andrew Hunter, deputy chief U.S. economist at Capital Economics, said that the JOLTS data casts further doubt that the Fed will not need to keep rate higher for a longer period.



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