US labor market data causes falling stock markets and gold - financial expert analyzes effects

US labor market data causes falling stock markets and gold - financial expert analyzes effects

According to a report by finanzmarktwelt.de,

We are currently seeing that both stock markets and the price of gold are suddenly falling. This decline is due to the release of US jobs data at 2:30 p.m. The data shows +353,000 new jobs, significantly exceeding expectations of +187,000 jobs, as well as an increase in hourly wages of +0.6% month-on-month.

This data could lead to the Federal Reserve keeping interest rates higher for longer in order to combat inflation more sustainably. This in turn could lead to a negative trend on the stock markets, as higher interest rates tend to be negative for stocks. High interest rates mean high credit burdens for companies and consumers, which can lead to lower consumption and sales.

Higher bond interest rates and bank account interest rates are also negative for gold, as the precious metal does not generate any interest or dividends. This creates a negative correlation in which gold and stock markets fall while the US dollar and US Treasury yields rise.

It is quite possible that this movement will intensify today, as US labor market data has been significantly stronger than expected. This could lead to more investors fleeing to safe havens such as the US dollar, which could have further effects on the market.