Gold is steadfast heading into the weekend, maintaining its important price threshold of around £1,310 ($1,800). The precious metal’s position at this critical support level comes as data from the US Labor Department published yesterday (Thursday) shows a higher than expected number of workers making a first claim for unemployment benefits.
While economists had expected claims to reach a low of 350,000 the figures actually spiked upwards, with 413,000 claims recorded. This means that an additional 51,000 people are out of work compared with last week’s claims.
Of course, a jump in the number of people requiring unemployment support means that the economic recovery continues to falter, something that is also being seen across the Atlantic. In the UK, data from the IHS Markit/CIPS purchasing managers’ index (PMI) shows a sudden slowdown in economic recovery. HIS Markit’s chief economist Chris Williamson said there were a number of reasons for the slowdown, noting “July saw the UK economy’s recent growth spurt stifled by the rising wave of virus infections, which subdued customer demand, disrupted supply chains and caused widespread staff shortages, and also cast a darkening shadow over the outlook.”
While it is to be expected that the path to recovery will not be linear, gold is an established safe haven and thrives during moments of downturn. Buy now.