Since the US economy creates less jobs than expected in May, gold prices are moving towards the positive region. Analysts and economists interpret the gold market in the light of recent developments.
John Feneck: Gold prices will continue to benefit from weak employment figures
On Friday, the Office of the Working Statistics said that 559,000 jobs were created last month. Economists were waiting to see about 645,000 business increases. Meanwhile, the unemployment rate came with 6.1 %with 5.8 %compared to April level. Consensus estimates called for a 5.9 %reading. Gold prices saw some modest gains before the report and rose to the first reaction to weaker employment figures than expected.
August gold futures were last traded for $ 1,884 with an increase of 0.57 %during the day. John Fenect, the founder of Feneck Consulting, said that gold prices and the golden stock industry will continue to benefit from weaker employment figures than expected. John Feneck adds the following to his explanations:
Another disappointment and in parallel to what we have foreseen for months: Since Americans are accustomed to charity, this job recovery will take a long time.
Adam Button: This is a frustration figure, but not a kind of disaster
Although the latest employment data were below expectations, the economists said that the market effect was much less than the previous month. This saw one of the biggest expectation losses in the report date. Forexlive.com’s main currency strategist Adam Button made the following statement:
This is a frustration figure, but not a kind of disaster, but in the accepted range. It is a gold figure for stocks, because it makes the table shrink even more. However, it does not indicate a slowdown in the economy.
Looking at the unemployment rate, economists and market analysts, the decline, workers’ departure from the labor market, said the participation rates falling. The participation rate fell to 61.6 %without reading 61.7 %in April.
In CIBC, senior economist described the employment report affecting gold prices as “overwhelming ..
Although the headline data is weaker than expected, the report drew attention to positive revision in April and March data. March employment figures were revised to 785,000 work compared to previous 770,000 predictions. Meanwhile, April data were revised compared to the first estimation of 266,000. Positive for the gold market, wage inflation continues to rise. The report stated that the average hourly fees increased by 14 cents or 0.5 %in May to $ 25.60. The last increase arrived after a 0.7 %wage increase in April.
The report, “the data for the last 2 months, in connection with the pandemin, increasing labor demand may have created upward pressure on wages,” the statement said. Katherine Judge, a senior economist in CIBC, described the latest employment report as “overwhelming .. However, Katherine Judge added that the Canadian Bank is optimistic that the labor market will continue to heal during the summer. Katherine Judge adds to his explanations about the subject:
According to our research, we expect millions of jobs to be added in the summer. This will probably be enough to allow the Fed to announce the reduction of QE to start at the beginning of 2022 at the September meeting.
Paul Ashworth: There is a long way to go …
Capital Economics’s US chief economist Paul Ashworth said that an employment report exceeding half a million at another time would be a significant success for the US labor market. However, it is a longest way to go before the labor market returned to pre -spandemic levels. Paul Ashworth adds the following to his explanations:
In May, the 559,000 increase in non -agricultural employment was at least one of the 278,000 earnings in April. However, while the prior to the employment level peak is still 7.6 million, it will last more than 12 months at this speed.
Paul Ashworth added that at the current employment increase rate, investors should not expect the Federal Reserve to change the current monetary policy soon. Kriptokoin.comAs we have reported before, for more gold estimation “For” next week “gold prices estimates from 21 analysts!”You can review our article.