{"id":4672,"date":"2023-05-05T14:12:42","date_gmt":"2023-05-05T18:12:42","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/commodities\/gold-tumbles-but-clings-to-2000-as-u-s-jobs-report-suggests-no-rate-pause\/"},"modified":"2023-05-05T14:12:42","modified_gmt":"2023-05-05T18:12:42","slug":"gold-tumbles-but-clings-to-2000-as-u-s-jobs-report-suggests-no-rate-pause","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=4672","title":{"rendered":"Gold tumbles but clings to $2,000 as U.S. jobs report suggests no rate pause"},"content":{"rendered":"
\n

Investing.com \u2014 Did gold bulls\u2019 bubble just burst?<\/p>\n

It appears so after the U.S. Labor Department announced another for April that presumably had the inflation fighters at the Federal Reserve shaking their heads ruefully.<\/p>\n

And the gold market responded accordingly to concerns that the Fed might not be done after all with its in June, with the spot price of bullion tumbling from the previous session\u2019s record high of above $2,080 to under $2,000 at one point.<\/p>\n

on New York\u2019s Comex settled at $2,024.80 an ounce, down $30.90, or 1.5%, on the day, after a session low at $2,007.10. On Thursday, Comex gold for June hit an all-time high of $2,082.80 an ounce.<\/p>\n

The , which reflects physical trades in bullion and is more closely followed than futures by some traders, was at $2,015.69 by 12:40 ET (16:40 GMT), down $34.51, or 1.7%. Earlier in the session, it broke below the $2,000 support, touching an intraday low of $1,999.66. On Thursday, spot gold hit a record high of $2,080.72.<\/p>\n

Economists tracked by Investing.com had expected just 180,000 new non-farm payrolls for last month. The Labor Department reported 253,0000 instead, or 40% more. But in a twist, the department also revised down the 263,000 non-farm payrolls it had previously reported for March to just 165,000 in Friday\u2019s report. The downward revision of 37% effectively meant the net increase in new jobs was just about 2%<\/p>\n

However, the headline jobs number was what mattered to traders. And that told everyone that the Fed would likely have misgivings about pausing rate hikes in June, especially when Chair Jerome Powell had taken pains to point out that the central bank\u2019s policy decisions going forth would be certainly data-driven.<\/p>\n

The labor market has been the juggernaut of U.S. economic recovery from the COVID-19 breakout, with hundreds of thousands of jobs being added without fail since June 2020 to make up for the initial loss of 20 million jobs to the pandemic. Average monthly wages have also grown with barely a stop since May 2021. The Fed has identified robust job and wages growth as two of the key drivers of inflation.<\/p>\n

Inflation, as measured by the , hit 40-year highs in June 2022, expanding at an annual rate of 9.1%. Since then, it has slowed, growing at just 5% per annum in March, for its slowest expansion since October 2021. The Fed\u2019s favorite price indicator, the , meanwhile, grew by just 4.2% in March.<\/p>\n

Even so, those numbers were more than twice the Fed\u2019s appetite for inflation, which stands at just 2% per annum. The central bank has raised rates by 10 times since the end of the coronavirus pandemic in March 2022, adding a total of 5% to the previous 0.25%.<\/p>\n

Aside from inflation, markets are also nervous about this week\u2019s resurfacing of a U.S. banking crisis that broke in March. Adding to that were concerns about a potential US debt default, the first ever, and more weak readings on factory orders and durable goods.<\/p>\n

\u201cAfter finally hitting record high territory, gold is under pressure after a hot NFP report pushed back Fed rate cut bets,\u201d Ed Moya, analyst at online trading platform OANDA, said, referring to April\u2019s non-farm payrolls. \u201cIf banking worries continue to ease and the economy remains resilient, some policymakers may want to resume tightening.\u201d<\/p>\n

Notwithstanding that, gold \u201cstill has a good chance to get back in a record setting mood\u201d, said Moya, pointing out that banking worries weren\u2019t about to go away anytime soon due to how exposed the regional banks were to commercial mortgages \u2014 and the yellow metal\u2019s standing as a safe-haven against such concerns.<\/p>\n

\u201cRegulators are scrambling and don’t have a clear plan to address the regional-banking crisis,\u201d Moya said, adding that requiring big banks to provide money to refill the deposit insurance fund hole left by failed smaller banks was \u201cjust another band-aid solution\u201d.<\/p>\n

Technically as well, gold was poised for a rebound after Friday\u2019s tumble, said Sunil Kumar Dixit, chief technical strategist at SKCharting.com.\u201cA potentially bearish \u2018Grave Stone Doji\u2019 triggered a healthy pull back for spot gold towards support areas,\u201d said Dixit. \u201cCurrent levels can attract buyers back for a resumption of the uptrend, targeting a retest of the $2,048 – $2,060 initially, and later $2,076.\u201d<\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Investing.com \u2014 Did gold bulls\u2019 bubble just burst? It appears so after the U.S. Labor Department announced another for April that presumably had the inflation fighters at the Federal Reserve shaking their heads ruefully. And the gold market responded accordingly to concerns that the Fed might not be done after all with its in June, […]<\/p>\n","protected":false},"author":1,"featured_media":2275,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[242],"tags":[83],"class_list":["post-4672","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-commodities","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nGold tumbles but clings to $2,000 as U.S. jobs report suggests no rate pause | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Investing.com \u2014 Did gold bulls\u2019 bubble just burst? 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