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Jobless Claims Inching Up in April: Is It Positive for Gold?

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Jobless claims increase for three consecutive weeks

Initial jobless claims for the week ending April 17 came in at 295,000, which is above expectations of 287,000. This is the third consecutive weekly rise in the number of jobless claims. The previous week’s figure was 294,000, and the figure for the week before that was 282,000. The four-week moving average was 284,500 for the week ending April 17 compared to 282,750 in the previous week.

So the overall job situation has been worsening in April as more people are filing for unemployment benefits.

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Initial Jobless Claims Report

The Initial Jobless Claims Report is issued by the U.S. Department of Labor on a weekly basis. This report tracks how many people have filed for unemployment benefits in the previous week. It’s a measure of strength in the labor market. Since weekly data could have statistical noise, the four-week average for jobless claims is often preferred. The Fed assesses the US jobs report to determine whether the economy is strong enough to withstand higher interest rates.

Jobs data impact gold investors

The Fed is closely watching jobs data. Any weakness in the labor market may defer the Fed rate hike. This information impacts gold-backed ETFs such as the SPDR Gold Trust (GLD) positively. Other affected investments include AuRico Gold Inc. (AUQ), Alamos Gold Inc. (AGI), Iamgold Corp (IAG), and Goldcorp (GG). It also affects ETFs that invest in these stocks, such as the VanEck Vectors Gold Miners ETF (GDX). AGI and IAG together make up 1.94% of GDX’s holdings.

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