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US jobless claims climb to the highest since December, gold resumes upward correction

<strong>US jobless claims climb to the highest since December, gold resumes upward correction</strong>
Ahmed Mamdouh

March 9, 2023

U.S. initial jobless claims climbed to the highest level since December, suggesting some softening in what’s still a robust labor market, helping gold to resume its short-term upside correction.

Initial jobless claims in the U.S. rose by 21,000 to 211,000 in the week through March 4, Labor Department data released on Thursday showed. Analysts had called for a rise in applications to 195,000.

Continuing claims, which include people who have received unemployment benefits for a week or more, also increased 69,000 to 1.72 million in the week ended February 25, marking the biggest soar since November 2021.

In spite of the rise in applications for jobless benefits last week, the labor market remains strong, as the latest private-sector employment and job openings reports published this week reflected the strength of the job market in the world’s biggest economy.  

Now, the key focus will turn to tomorrow’s U.S. non-farm payrolls figures, as it may guide the Federal Reserve regarding its next interest rate decision. American employers may have added 224,000 jobs in February, a slowdown from a robust hiring pace of 517,000, according to median forecasts.

Fed Chief Jerome Powell reiterated on Wednesday that the terminal rate is likely to be higher than expected, yet he noted the rate decision in March would be data dependent.

It is worth mentioning that Fed funds futures see a 70% chance of a 50 basis point Fed rate hike in March, up from just about 9% a month ago.

As of 16:40 GMT, gold prices surged to resume its short-term upward correction that has started since hitting a one-week low the previous session.   The yellow metal is expected to face resistance at $1830, noting that its breach would pave the way for rising further until resistance at $1843. On the other hand, key support levels are located at $1805 then $1785.