GOLD,SILVER & PRECIOUS MARKET WRAP

The price of gold has become one of the dominant themes in global markets over the past couple of years as the financial crisis unravelled. The Gold wrap reports on the latest trends in the price of the precious metal as well as factors influencing the demand for the safe haven asset.

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Gold climbs after US jobs data hits US dollar

August 03 2012, 3:39pm
Gold climbs after US jobs data hits US dollar

Gold rallied this afternoon, tacking on more than US$10 per ounce, as the US dollar fell sharply after the Department of Labor reported that non-farm payrolls added 163,000 in July.

The gain was above expectations as analysts projected an increase of around 100,000, however, the figures also revealed that the jobless rate climbed to 8.3 percent to 8.2 percent. Additionally, the estimate for June was reduced to only 64,000 from 80,000.

The data increased the likelihood of more bond buying by the Federal Reserve, which decided against taking any action at this week’s policy meeting. Analysts suggested that the Fed wanted to see more economic data and would likely decide whether to launch a third round of quantitative easing at the September policy meeting.

More QE would weaken the US dollar – which has an inverse relationship with gold – and boost the yellow metal’s appeal as an inflation hedge.

Gold also received support from a statement by the International Monetary Fund (IMF), which said the EU was not doing enough to prevent the debt crisis from spreading throughout the euro zone.

Gold traded at US$1,601/oz this afternoon, up US$13 from Thursday’s close. Silver rallied 57 cents to US$27.70/oz and platinum added US$15 to reach US$1,396/oz.

Today’s top risers in the sector were:

Premier Gold (LON:PGR), up 6.5 percent at 0.33 pence at midday

Hambledon Mining (LON:HMB), up 6 percent at 1.67 pence

Avocet Mining (LON:AVM), up 4.5 percent at 85 pence

Polymetal (LON:POLY), up 3 percent at 878.5 pence

The top fallers were:

Oxus Gold (LON:OXS), down 11 percent at 2.5 pence at midday

African Consolidated Resources (LON:AFCR), down 7.5 percent at 2.42 pence

Vatukoula Gold (LON:VGM), down 6.5 percent at 27 pence


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