On May 24 of www.daily.com.cn, London gold continued to fall during the intra day Asian trading period, and the current trading volume is around 2330 dollars/ounce. The number of US initial claims for unemployment benefits announced on the previous trading day all declined, and the US PMI data also hit a new high since April 2022. Affected by this, investors were worried about the actual interest rate cut by the Federal Reserve and the strong performance of US corporate activities. London gold hit a minimum of $2326.90/ounce, a new low since May 9.
On Friday (May 24), London Gold opened at $2328.71 per ounce. As of press release, London Gold temporarily recorded $2329.39 per ounce, up 0.03%.
The number of new claims for unemployment benefits in the United States fell last week, indicating that the potential strength of the labor market should continue to support the economy.
Data released by the US Labor Department on Thursday showed that the number of people applying for unemployment benefits for the first time fell for the second consecutive week, reversing most of the increase at the beginning of this month, when the number hit the highest level since the end of August. The Federal Reserve raised interest rates significantly in 2022 and 2023, resulting in a slowdown in employment growth, but the number of layoffs is still small.
"The number of people who applied for unemployment benefits for the first time declined from the previous week, so the acceleration that some people feared did not occur," said Robert Frick, an enterprise economist at Navy Federal Credit Union. "The labor market is still strong. If the number of jobless claims is the canary in the coal mine, it does not even have a slight cough."
As of the week of May 18, the number of people applying for unemployment benefits from the state government for the first time dropped by 8000, to 215000 after seasonal adjustment. Economists had predicted that the number of applicants was 220000. The number of applicants declined significantly in California and Indiana.
After the recruitment difficulties during and after the COVID-19 epidemic, enterprises generally strive to retain workers. A survey report released by S&P Global on Thursday showed that the decline rate of factory and service industry employment slowed down in May, which also emphasized this point.
With the rebound in manufacturing employment, S&P Global said that the U.S. composite purchasing managers' index (PMI), which tracks manufacturing and service industry activities, jumped to 54.4 in May, the highest level since April 2022.
Next week's unemployment benefit data may give more clues about the labor market.
Influenced by these data, the dollar index returned to above 105.00. In addition, the minutes of the Federal Reserve meeting released on Wednesday showed that Federal Reserve officials discussed the need to keep interest rates stable for a longer period of time, or to reduce interest rates in the case of a weak labor market, while "multi party" officials at the meeting also mentioned their willingness to increase interest rates if necessary. This is a disadvantage for King in London.
Long term high interest rates make the US dollar more attractive. Guiding external funds to the US dollar market will lead to more expensive prices of precious metals denominated in US dollars.
Daniel Ghali, commodity strategist of TD Securities, said that the strong US dollar and the weak prospect of interest rate cut in the United States had catalyzed a round of profit taking of London Gold.
Vladimir Zernov, an independent trader and analyst at Fxempire, predicted that London Gold would lose momentum as traders focused on the rise of bond yields; London Gold is near its historical high, under great pressure as traders continue to take profits. The rise in bond yields has also become an additional negative factor in the London gold market. If London gold falls below 2340 dollars/ounce, it will move towards the support level of 2295 dollars/ounce – 2305 dollars/ounce.
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