Gold prices soar after weekly jobless claims in the US hit 6.6 million

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(Kitco News) – The gold market continues to make further gains as the US labor market continues to deteriorate, with weekly jobless claims registering another 3 million claims.
Initial jobless claims in the United States soared during the week of Saturday to a record 6.64 million seasonally adjusted, up 3,341,000 from the previous week’s revised level of 3.307 million.
“This is the highest level of seasonally adjusted initial demands in the history of the seasonally adjusted series,” said the report.
The new record comes after last week’s historic report, when claims exceeded 3 million. According to consensus forecasts, economists expected to see jobless claims rise to 3.5 million
Gold prices are pushing up after the record rise in jobless claims. June gold futures were last traded at $ 1,626 an ounce, up more than 2% on the day.
Andrew Grantham, senior economist at CIBC, said markets may not be fully prepared for the latest employment data.
“While the markets would have been prepared for a bad impression in today’s loss figures, the impact of the sticker on its severity could still cause a modest market reaction,” he said. “These data certainly suggest that the unemployment rate will peak higher than we previously thought in the short term, with an increase of more than 10% now likely in the coming months. “

“The weekly claims report also confirms that the US economy has been severely crippled by the coronavirus epidemic,” said Jim Wyckoff, senior technical analyst at Kitco.com.
The increase in weekly demand continues to be the result of the slowdown in activity as the country attempts to limit the COVID-19 epidemic. The United States has become the new epicenter of the global pandemic, with the number of infected people exceeding 200,000. States and cities have put in place lockouts, asking people to stay home as much as possible.
Meanwhile, the four-week moving average of new demand – often seen as a more reliable measure of the labor market because it reduces volatility from week to week – jumped from 1,607,750 to 2,612,000.
The number of people already receiving benefits and declared one week late increased by 1,245,000 to 3,029,000 in the week ending March 21, the government said.
“This is the highest level of unemployment guaranteed since July 6, 2013, when it was 3,079,000,” said the report.

Grantham added that the number of people applying for unemployment insurance was around 4% of the previously employed population, which is in addition to the 2% from last week’s data.

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