The current US unemployment benefits situation remains worrisome, although it seems to stabilize a bit. Despite an indication of things improving, the number of claims is still incredibly high. All of this will prove beneficial to safe havens, including gold.
Why US Unemployment Benefits Matter
It is no secret that the global monetary system has come under tremendous strain. More and more countries are facing very tough decisions. Central banks struggle to keep up with the demand for more money, yet no one wants to print unlimited money just yet. One has to wonder how long it will take until the inevitable happens.
Based on new US unemployment benefits numbers, things are not looking all that great. The US labor market is still on wobbly legs, and applications for weekly benefits have risen slightly, A total of 884,0000 American actively seek benefits to get through the coming week. All of this money has to come from somewhere, yet the situation has already become virtually unsustainable.
One has to keep in mind all of these filings pertain to first-time jobless claims. It is a very high number, and one that may not necessarily decrease in the near future either. America’s economy is struggling, and the COVID-19 pandemic isn’t under control just yet. In fact, the situation is still spiraling out of control ever so slightly, with no recourse in sight just yet.
Gold Begins Moving up
Some people might have expected the US unemployment benefits to have an immediate impact on the gold price. That is not how these things work, unfortunately, Gold remains in its range without seeing too much action in either direction. Even the US employment benefits figures are not affecting the current market all that much. This situation may change at any given moment, however.
Looking at the gold futures, however, things are getting a bit more interesting. Albeit the uptrend is minimal, it certainly seems the market is preparing for another uptick. A lot can change between now and December, however. Putting all of one’s eggs in the gold futures basket may not be ideal either.
A lot of the potential momentum comes down to the number of US employment benefits claims. If this number keeps decreasing, there’s no immediate increase in appeal for gold and other precious metals. Rising numbers, on the other hand, can push the bullion price toward $2,000 and potentially more. Predicting the market’s momentum is always difficult, but under these circumstances, even that has become nigh impossible.