Unemployment claims affect..

Will the US Unemployment Claims Lead to Losses for Crude Oil?

July 19th, 2012 Posted in Analyst Picks 

At FOREXYARD, we believe in keeping our clients prepared for potentially significant news events. As such, traders will want to carefully monitor the US Unemployment Claims figure, scheduled to be released today, at 12:30 GMT. The unemployment indicator tends to have a broad impact throughout the marketplace. As can be seen in the chart below, the price of crude oil tumbled following the release of the June 21st figure.

Don’t miss out on another opportunity to capitalize on market volatility!

Today’s figure is forecasted to come in at 370K, which if true, would represent an increase in US unemployment from last week. Should the indicator come in as forecasted, investors may take the news as a sign that the US economy is weakening, which could result in the price of oil falling during the afternoon session. This is an excellent opportunity for forex traders to take advantage of potentially significant news, so don’t miss out!

Unemployment claims and gold prices

KATHMANDU: A successful investor has to be updated about news and announcements around the world. The US economic indicators are prime factors that affect commodity prices. The value of gold has historically moved inversely with the value of the dollars as an alternative investment. Hence, reports from USA provide a valuable analysis through which an investor can determine the future trend of gold. It is difficult to comprehend which types of reports are important in this regard. Yet, there are few reports whose significance cannot be doubted. A high impact report has always been the US Unemployment Claims which is released every Thursday. This weekly report tracks new filings for unemployment insurance benefits that exhibit the true scenario of the labour market which directly affects the value of the dollar and consequently the prices of gold. A steady increase in the initial claims from a languishing domestic economy will turn foreign investors away from the US securities and thereby weaken the dollar and strengthen gold. A helpful catalyst in this analysis is the US Dollar Index (USDX), which measures the performance of the dollars in comparison to the basket of six currencies namely, euro, Japanese yen, pound sterling, Canadian dollar, Swedish krona and Swiss franc. The USDX will normally strengthen when unemployment claims drops and vice versa. There is a positive relationship between value of gold and unemployment claims. On March 3, when un-employment claims fell dramatically by 20,000 to a figure of 368,000, the USDX improved to 76.86, which in turn led to gold prices plunging to a low of Rs 34,118.37. This meant that the labour situation was improving, which indicated overall optimism in the economy. When un-employment claims rose to 397,000; the USDX fell to 76.63 which in turn led to the increment of gold prices to a high of Rs 34,643.75. This meant that the labour situation was worsening, which indicated a pessimistic outlook on the economy. Therefore, any investor wanting to invest in gold should look at the weekly unemployment claims report and trade accordingly.