Gold Takes a Beating as Jobless Numbers Sink

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By Jacob Maslow

Gold Bullion and Coins
Investment in Gold Bullion and Coins

The number of jobless Americans has fallen quite a bit. In fact, the number of US jobless claims look like it fell off a cliff. From 308,000 a week earlier, new claims hit a surprisingly low 265,000. This is yet another indicator that the American economy is finally getting its legs back for good.

Of course, whenever the American economy solidifies, this can’t help but spell bad news for gold. Gold, and precious metals generally, are stores of value. These are commodities people buy into when they feel that there is economic uncertainty. When they feel that they really can?t invest in stocks or bonds or anything else, they have at least gold to fall back on.

Well, it looks like paper assets are making a comeback in the American market due to the strengthening signs of an American recovery. This is putting a lot of pressure on gold. Not surprisingly, gold fell by 2.4% to settle at 1,254.60 an ounce.

As sad as this development may be for gold bugs, they should cheer up. The reality is that the rest of the globe is not having as good of a time as the United States. Japan is still in deflation. Europe is trying to crawl out on its collective economic hole, and there are few other bright spots on the planet. The United States is the brightest spot but there are certain weak areas in its economy.

As exciting as falling oil prices may be for consumers, that can spell bad news for the overall US jobs market if it persists. There are going to be a lot of oil industry-related jobs lost due to the increasing decline in global oil prices. How much of an effect this may make on the overall jobs picture remains to be seen. Regardless, as awesome as last week’s jobs figures may be, it would be ill-advised to think that it would be a long-term trend without additional information.

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