In the USA, where the Fed is closely monitoring the job market before deciding whether to raise rates, companies in April added fewer workers to payrolls than economists projected, according to figures Wednesday from the ADP Research Institute in Roseland, N.J.
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The same report on Friday indicated that the Labor Department revised its statistics for job creation during February and March downward by a total of 19,000.
Add a jump in open interest to signs that gold’s rally may persist after the best start to a year in a decade.
The data cast doubts on whether the Federal Reserve will raise interest rates before the end of the year.
Mr Bloxham said China’s economic performance, commodity prices and Fed interest rates were the three critical factors for Australia’s economy.
The dollar rose 0.7 per cent to US$1.1404 per euro.
“Now that the slipping global economy is bearing testimony to the sweeping tide of deflation and the USA dollar is likely to weaken further from now on, we expect $1,300 [an ounce] to be attacked again and this time more successfully”, said Julian Phillips, founder of and contributor to GoldForecaster.com. The dollar weakened to Yen107.12 late Friday in NY, from Yen107.27 late Thursday.
Bank of America economists described the employment report as “disappointing” and now only expect one USA interest rate hike this year, in September, followed by another rise in March 2017. Reluctance to raise rates would be a drag on the buck and deliver a boost to dollar-denominated assets, like gold. Today getting the unemployment rate data and then non-farm payrolls that the market hangs so much weight on despite the incredibly wide standard deviation which is associated with the estimates for these numbers, we think it is consistent with still reasonable pace of job growth but we should be cognizant of the fact that the trend growth of payrolls has been slowing all through 2015 compared to the pace of growth in jobs that we saw in 2014. Unemployment remained steady at 5%. For instance, Bank of America Merrill Lynch’s economic research team no longer believes the USA central bank will raise its rate target in June and again in December; it believes we will only see one hike, in September. Other indicators, including measures of economic growth and productivity, have been unexpectedly weak in recent months.
“Wages moved up. That’s important, and suggests you’re continuing to see tightening in the labor market”, said Quincy Krosby, market strategist for Prudential Financial.
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Mann also spoke about the United States jobs data scheduled today, tempering expectations saying: “The trend growth of pay roll has been slowing all through 2015 compared to pace of growth in jobs in 2014, it’s partially a symptom of a relatively tighter labor market”.
