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Ongoing instability in the US labor market pushed gold prices down. But the main driver of selling pressure was the hawkish statements of the Federal Reserve on Wednesday.
According to the report of the US Department of Labor, initial jobless claims rose 16,000 to 351,000 during the reporting week, up from a revised estimate of 332,000 in the previous week. This was a surprise to analysts because they expected the figure to drop to 322,000.
Continuing claims also increased to 2.845 million, up 131,000 from the revised level of the previous week.
Business activity in US manufacturing and services sectors were also not the best as the IHS Markit said growth slowed much more than expected in September. Manufacturing PMI reportedly fell to 60.5 points, from 61.1 points in August. Meanwhile, service PMI dropped to 54.4 points, from 55.1 points in August.
The slowdown was due to a decrease in demand in the service sector, which can not be said to the manufacturing sector as it sees much stronger demand. But factories are facing increasing challenges on materials and manpower, hindering them to fulfill orders.
Sadly, the latest economic data can not help gold rally, and inflationary pressures continue to rise.
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