Although gold remains under pressure, the price still holds above $1,850. This shows that the market is holding up relatively well amidst the recent strong data on US employment.
On Friday, the US Department of Labor reported that 390,000 jobs were created in May, much higher than the expected 325,000 of economists. The unemployment rate, meanwhile, did not live up to expectations, remaining at the level of 3.6%.
Some market analysts say the gold market saw little change because the good employment data indicates weaker-than-expected inflationary pressures.
The report also noted that the average hourly wage rose 10 cents (0.3%) to $31.95, slightly lower than the expected 0.4%. The average salary, on the other hand, increased by 5.2% over the year.
Economists say slower wage inflation could give the Federal Reserve room to act less aggressively as it tightens its monetary policy. After all, the central bank said it intends to raise interest rates by 50 basis points over the next few meetings, while markets are awaiting three-time increases of 50 basis points.
But Michael Pierce, senior economist at Capital Economics,said the Federal Reserve is planning a two-time rate hike.
Nevertheless, most economists say the labor market continues to rise and more evidence is needed that inflation is under control.
