The gold market got a boost because the U.S. job market slowed down more than people thought in April. The government’s data showed that the number of jobs in the U.S. went up by 175,000 last month. But that’s less than what experts predicted, which was around 238,000 jobs.
It’s the slowest job growth rate since November last year. Also, the percentage of people without jobs, called the unemployment rate, went up to 3.9%. Experts thought it would stay the same at 3.8%.
Before the report came out, the price of gold was holding steady around $2,300. But once the report was released, gold prices quickly jumped up. Right after the report, gold was trading at $2,326.10 per ounce, which was a significant increase for the day.
The report also showed that wages, or how much people get paid, didn’t grow as much as expected last month. This made people less worried about prices going up, or inflation. On average, hourly wages only went up by 0.2% or $0.07, while experts thought they would go up by 0.3%.
In the last year, hourly wages have gone up by 3.9%, which is something to note.
Some experts say that because of this new jobs data, the Federal Reserve might decide to lower interest rates sometime this year, although exactly when is still uncertain.
This new jobs data comes after the Federal Reserve decided to keep interest rates the same for the sixth time in a row. They’re keeping rates high to try to keep prices from rising too fast, but it looks like prices are still going up faster than they’d like.
Overall, the recent earnings data has calmed worries about prices rising too fast because people are not getting big raises. Also, the increase in the unemployment rate and the lower number of new jobs suggest that the U.S. economy might be slowing down a bit. This doesn’t mean it’s in trouble, just not growing super fast.
Some people might think that because of this, the Federal Reserve (the folks who control interest rates) should lower rates to help boost the economy. But that’s not very likely because of what was said at the latest meeting. However, it does support what the head of the Federal Reserve, Powell, said about not raising rates for now.
This news also means that the chances of the first rate cut happening earlier have gone up, maybe in September instead of November. As for gold, this news doesn’t give us a clear idea of what will happen in the long term. It just needs to move out of its current slow period, and then more people might want to buy it again.
