Gold prices see some selling pressure as US economy created 165k in October

(Kitco News) - After a slow summer, the U.S. labor market appears to be picking up significant momentum, which, as expected, is once again putting pressure on gold, with renewed focus on support at $4,000 an ounce.U.S. nonfarm payrolls rose by 165,000 last month, according to the Bureau of Labor Statistics. The monthly figure significantly beat consensus forecasts, as economists had expected job gains of around 60,000.At the same time, the unemployment rate dropped to 4.1%. Economists had expected the rate to remain unchanged at 4.2%.Analysts had warned investors that the gold market could be sensitive to outsized job gains. Spot gold last traded at $4,046 an ounce, down 1% on the day.Analysts note that gold has struggled to attract new bullish momentum because the Federal Reserve has maintained a tightening bias. The central bank has made it clear that if the labor market remains relatively healthy, it will continue to focus on the persistent threat of inflation. Analysts have said that the latest employment report gives the Federal Reserve ample room to raise interest rates in December and the first quarter of 2027.“The jobs report was too strong to let the Fed relax: 165,000 new jobs, unemployment down to 4.1%, and wage growth running at 0.4% in a month. That is not a soft-landing signal for gold—it is a bond-yield signal. Treasury yields are rising because markets now see an economy that can tolerate restrictive policy for longer,” said Terri-Leigh Bennett, COO at CMS Prime, in a note to Kitco News.Fawad Razaqzada, Market Analyst at FOREX.com, noted that the latest labor market data could provide new momentum for the U.S. dollar, creating another headwind for gold.“This solid employment report should reinforce the Federal Reserve’s assessment that the labour market remains solid, potentially stabilising front-end yields and providing some support for the dollar,” he said.Along with solid gains in headline employment, the report also highlighted significant upward revisions to September and August employment data. September's employment gain was revised up to 60,000 jobs, compared to the initial estimate of 29,000. At the same time, August's employment gain was revised up to 133,000 jobs from the previous estimate of 53,000.The report also noted that wages increased last month. Average hourly earnings rose by 14 cents, or 0.4%, to $38.00 in October. Economists had expected a 0.3% increase in wages, compared to a 0.1% increase in September.

Gold prices see some selling pressure as US economy created 165k in October

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