AGE Daily Gold Update

AGE Daily Gold Update presents a recap on today's action in the precious metals markets. View archives.

3/9/2023: Gold gains on rising jobless claims

Source: Bill Musgrave, American Gold Exchange

Austin — Gold gained 0.9% to close near $1,835 after rising jobless claims spurred hopes for a less-aggressive Fed, undercutting yields and the dollar while lifting safe-haven assets.

First-time filings for unemployment benefits surged by 21,000 last week to 211,000, the highest level in two months, led by tech layoffs in California and teacher filings in New York. Initial jobless claims are viewed as a good barometer of the direction of the economy.

With the markets anxiously awaiting tomorrow's release of the government's nonfarm payrolls report for February, the jobless data suggested the possibility that the too-hot labor market might be cooling.

Earlier this week, Fed Chair Jerome Powell told Congress that "higher and possibly faster rate hikes" may be coming if data, especially jobs data, remains strong. The hawkish message rallied the dollar and lifted yields, pressuring gold into heavy losses.

If tomorrow's much-anticipate release of the government's February jobs report comes in anywhere near January's blowout print of 517,000, the odds of a rate of hike of 50 basis points this month would dramatically increase. If the total is significantly lower, the Fed is more likely to hike by a quarter-point.

Benchmark 10-year Treasury yields pulled back slightly, and 2-year yields fell under 5% as traders speculated that last week's jobless claims could augur smaller hike. In addition, concerns that the Fed might tighten into a recession boosted flights to safety, further pressuring yields.

The dollar declined 0.3% as traders, hedging their bets, took profits from the buck's recent rise to a three-month high. A falling dollar lifts gold by making it cheaper in other currencies.

The other precious metals were also higher, with silver adding 0.1% while platinum and palladium each climbed 0.9%.

At the Comex close: April gold rose $16 to $1,834.60; May silver added a penny, to $20.17; April platinum picked up $8.70 to $949.30; and June palladium advanced $12.60 to $1,374.70 an ounce.