Gold Slides Following US Jobs Report
03 June 2022
The USD strengthened, US yields rose and gold plunged after today's US jobs market data, which came out mixed.
At the time of writing, gold was down 0.5%, trading at around 1,860 USD.
US labor market remains strong
In May the US added 390,000 jobs, which was a drop from last month's upward revised 436,000 and the lowest since April 2021 but was well above the 320,000 expected
The unemployment rate remained unchanged at 3.6%, missing forecasts for a reduction to 3.5 percent, the lowest level since the financial crisis. The participation rate ticked up a notch, from 62.2% to 62.3%, in line with consensus estimates.
Average hourly wages increased 5.2% on an annual basis, which was in line with predictions and down from 5.5% last month. The monthly wage growth stayed at 0.3%, below the 0.4% predicted.
Bears defend strong resistance
So far, gold has failed to jump above November highs of 1,875 USD, still giving bears a chance to defend the medium-term downtrend.
However, if gold jumps above that level, larger stop losses of short positions could be hit, likely sending the metal beyond 1,900 USD.
On the downside, the significant support lies at the 200-day moving average near 1,840 USD, followed by this week's lows at 1,830 USD.
The overall trend seems rather unclear until gold either breaks above 1,875 USD or drops below 1,830 USD.