Gold Advances Above $1,400 as U.S. Payrolls Increase Less Than Estimated

December 3, 2010

Friday December 3 2010   Bloomberg   By Nicholas Larkin  

Gold climbed above $1,400 an ounce in New York as the dollar weakened after U.S. hiring trailed economists’ forecasts, boosting demand for a protection of wealth. Silver futures advanced to a 30-year high.

U.S. employers added less than one-third as many jobs in November as economists had forecast and the jobless rate rose to 9.8 percent, the highest level since April, Labor Department figures showed. Gold futures, which usually move inversely to the greenback, reached a record $1,424.30 an ounce on Nov. 9.

“Ongoing economic uncertainty and the possibility of more quantitative easing needed to counter high unemployment and stagnation in an economic recovery are a solid ground for gold investment,” said Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland.

Gold futures for February delivery added as much as $20.60, or 1.5 percent, to $1,409.90 an ounce and traded at $1,407.10 at 11:51 a.m. on the Comex in New York. Prices are up 3.1 percent this week. The metal for immediate delivery in London was 1.5 percent higher at $1,405.97.

Payrolls increased by 39,000 positions last month after a revised 172,000 increase the prior month, the Labor Department said. The U.S. unemployment rate has held at 9.5 percent or higher since July 2009. It reached 10.1 percent in October 2009, the highest since June 1983.

Gold also gained this week on concern about Europe’s debt crisis and on speculation China, the world’s second-biggest bullion buyer after India, will consume more of the metal.

Read full story: http://www.bloomberg.com/news/2010-12-03/gold-advances-set-for-second-weekly-gain-on-china-buying-weaker-dollar.html