Gold Price on May 9: Rate Rises on Possible Fed Reaction to Unemployment Data

By
Bill McColl
Bill McColl
Full Bio

Bill McColl has 25+ years of experience as a senior producer and writer for TV, radio, and digital media leading teams of anchors, reporters, and editors in creating news broadcasts, covering some of the most notable news stories of the time.

Learn about our editorial policies
Published May 09, 2024
Gold bullion bars and coins

Mario Tama / Staff / Getty Images

Key Takeaways

  • The spot gold price advanced Thursday as a bigger-than-expected jump in weekly unemployment claims raised optimism about potential Federal Reserve interest rate cuts.
  • The Bank of England suggested it is moving closer to lowering rates, and Sweden's central bank made its first cut since 2016.
  • Strong export data from China also helped boost gold prices.

The spot price of gold rose 1.4% to $2,339.76 as of 3:35 p.m. ET Thursday as a rise in weekly jobless claims raised optimism the labor market will slow enough to allow the Federal Reserve to cut interest rates.

Higher-Than-Expected Weekly Jobless Claims

The Labor Department reported initial unemployment claims totaled a seasonally adjusted 231,000 for the week ending May 4, an increase of 22,000 from the previous week and above forecasts. That followed last week’s report on April job creation showing employers added fewer job than expected last month, raising hopes that a slowdown in the labor force could push the Fed toward lowering interest rates, which would be bullish for gold.  

Bank of England, Riksbank Interest Rate Moves

Meanwhile, other central banks gave encouraging signs about lower borrowing costs. The Bank of England (BoE) held interest rates steady, but gave indications that policymakers were closer to cutting them. Yesterday, Sweden’s central bank, the Riksbank, reduced rates for the first time since 2016.

China's Export Growth Helps Fuel Gold Price Gains

Gold also got a boost from a positive report on the Chinese economy, which posted stronger-than-expected exports last month. China is a key player in the gold market, with the World Gold Council noting it was one of the biggest government buyers of gold in the first quarter.

XAUUSD

TradingView
Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.

  1. Department of Labor. “UNEMPLOYMENT INSURANCE WEEKLY CLAIMS.”

  2. MarketWatch. “U.S. Economic Calendar.”

  3. The Wall Street Journal. "Bank of England Leaves Interest Rates Unchanged, Signals It’s Closer to Cutting."

  4. Sveriges Riksbank. "Policy rate cut by 0.25 percentage points to 3.75 per cent."

  5. Bloomberg. "China’s Exports Return to Growth in April, Boosting Economy."

  6. World Gold Council. “Gold Demand Trends Q1 2024.”

Take the Next Step to Invest
×
The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.