Recap: Large Sell Order Halts Gold Market, Jobless Claims Not What They Seem
On Thursday, gold (NYSEARCA:GLD) futures for December — the most active contract — dropped $33.20 to close at $1,330.60 per ounce, while silver (NYSEARCA:SLV) futures plunged $1.02 to finish at $22.15. It was gold’s lowest close in about one month.
Both precious metals fell sharply as jobless claims in the United States declined to their best level since April 2006. According to the U.S. Department of Labor, the number of first-time claims for unemployment benefits dropped by 31,000 to a seasonally adjusted 292,000 for the week ended September 7, 2013. Economists expected a reading of 330,000 claims.
However, the better-than-expected report confounded analysts who were expecting a modest increase. In fact, the drop was exaggerated if not completely wrong. The problem is that decline was likely caused by two states — one big and one small — that initiated a computer upgrade preventing officials from processing all the claims they received during the week due, thus artificially lowering the number of claims.