Gold prices hover around $3,400 as US unemployment claims remain high
World gold prices hover around the $3,400/ounce mark as the number of unemployment claims in the US remains high and investors await the Fed's interest rate decision.
Gold prices are currently hovering around $3,400 an ounce and have yet to generate new momentum, despite the high number of Americans filing for unemployment benefits for the first time.
Initial jobless claims fell 5,000 to 245,000 in the week ending June 14, the Labor Department said, in line with analysts’ expectations. However, the previous week’s figure was revised up to 250,000. Despite the slight decline, the figure is still the highest since early October.
Gold prices are currently trading sideways in a narrow range after failing to sustain gains above the $3,400 mark last week. That gain was largely driven by concerns about conflict in the Middle East, but as the situation between Israel and Iran remains under control in the region, safe-haven demand has eased, taking some of the appeal out of gold. Spot gold was last seen at $3,387.79 an ounce, almost unchanged on the day.
Although claims fell last week, the four-week average rose sharply to 245,500, the highest level since August 2023.
At the same time, the number of people continuing to receive unemployment benefits has not improved much. In the week ending June 7, the number of continuing claims decreased slightly by 6,000 to 1.945 million, showing that finding a job after unemployment is becoming more difficult.
Although gold prices are holding back, some experts say a weak labor market could support gold in the long term. As employment weakens, the US Federal Reserve (Fed) may be forced to ease monetary policy, including a possible interest rate cut later this year.
The Fed is expected to keep interest rates unchanged at its policy meeting this afternoon. However, investors will closely monitor newly released economic forecasts for clues on the next direction of monetary policy.
