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March 2, 2024
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Precious Metals

Gold prices remain in neutral territory as ADP says 164K jobs created in December

(Kitco News) – The gold market is holding relatively steady gains but could struggle as the U.S. labor market remains healthier than expected as the economy continues to create new private sector jobs, according to private-sector payrolls processor ADP.

Thursday, ADP said that 164,000 jobs were created in the final month of the year. The report beat expectations at consensus forecasts called for job gains of 120,000.

“Job gains rose for the fourth straight month, led by a healthy bump in leisure and hospitality hiring. Construction held strong in the face of high interest rates, but manufacturing continued to struggle, notching another month of losses,” the report said.

The gold market is not seeing much reaction to the latest employment data as prices recover from Wednesday’s sharp selloff. Spot gold last traded at $2,043.20 an ounce, nearly unchanged on the day.

Although the U.S. economy continues to create more jobs than expected, the report noted that wage inflation is becoming less of a threat to the economy.

The report said that for workers who stayed in their job saw their wages rise 5.6% last month, down compared to November’s increase of 5.6%. Wages have been steadily declining since September 2022.

“We’re returning to a labor market that’s very much aligned with pre-pandemic hiring,” said Nela Richardson, chief economist, ADP. “While wages didn’t drive the recent bout of inflation, now that pay growth has retreated, any risk of a wage-price spiral has all but disappeared.”

Some analysts have described the latest employment data as a “goldilocks scenario” as employment remains robust but inflation continues to ease. However, some analysts have said that the report doesn’t support an imminent rate cut from the Federal Reserve.

The following are employment changes by Industry Sector:

– Goods-producing:     9,000
•    Natural resources/mining     -2,000
•    Construction     24,000
•    Manufacturing     -13,000

– Service-providing:     155,000
•    Trade/transportation/utilities     15,000
•    Information     -2,000
•    Financial activities     18,000
•    Professional/business services     1,000
•    Education/health services     42,000
•    Leisure/hospitality     59,000
•    Other services     22,000


Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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