U.S. weekly jobless claims hit 7-month high, providing bullish traction for gold

The momentum in the U.S. labor market continues to slow down, with weekly jobless claims pushing back to its highest level since October 2021. The latest report, provided by the U.S. Labor Department, showed that weekly jobless claims increased by 28,000 to 242,000, significantly missing expectations. Economists expected jobless claims to rise at a much slower pace to 236,000. The four-week moving average for new claims rose to 237,250 claims, and continuing jobless claims fell to 1.757 million during the week ending May 27, 2022.

The disappointing employment data is providing some bullish traction for gold as prices trade near session highs. According to some analysts, the latest employment data supports the growing idea that the Federal Reserve’s aggressive monetary policy tightening has come to an end. The CME FedWatch Tool suggests that the markets see more than 73% chance of the Fed leaving interest rates unchanged next week, while less than a 50% chance of another hike in July.