Gold Hit by Surprise US Unemployment Figures
The gold price has taken a blow after unexpected news from the United States labour market. Official figures released today show unemployment in America in the month of May fell to 13.3%, confounding economic analysts who had been expecting the rate to rise past 20%.
In April, the official unemployment level was at 14.7% but it appears that firms are beginning to hire workers again across the Atlantic. This comes amid loosening shutdown restrictions, allowing more businesses to reopen again. Although this news will come as a slight relief to the White House, potentially distracting from the protests about the killing of George Floyd, the figure still remains worryingly high. To put this percentage in context, the highest unemployment level during the 2009/10 financial crisis was around 10%.
Unemployment figures from the United Kingdom are due to be released on the 16th June, but they will be for the month of April, which is likely to paint a grim picture of the damage the 'lockdown' is having on the British economy.
Stock markets have rallied as a result of this. In contrast, gold has been slipping against the US dollar and even more against the pound sterling. At the time of writing (5/6/20), gold is priced at £1,319.24 ($1,676.80) per troy ounce, which is a drop of 6.52% over the last week. To exacerbate this, one pound is now worth $1.27, which is a rise of 3.43% over the last week, which is important as gold is primarily priced in US dollars. After the highs of mid-May, this drop in the price level of gold could be the perfect window to invest in the precious metal.
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