Gold trended up Friday, adding $13.50 per ounce to the most-traded December contract to settle at $1,386.50 an ounce after having gone as high as $1,393.60 earlier in the day as downbeat data bolstered the precious metal's safe haven appeal.
The firmer gold price will provide some upward momentum on Monday for Australian listed gold stocks such as Silver Lake Resources (ASX:SLR), Millennium Minerals (ASX:MOY), ABM Resources (ASX:ABU), Medusa Mining (ASX:MML), Mutiny Gold (ASX:MYG) and Newcrest Mining (ASX:NCM).
The metal rallied when U.S. non-farm payrolls were released, showing weaker than expected results, once again apparently forestalling the tapering once thought imminent.
The U.S. added 169,000 jobs in the month just ended, down on the forecast figure of 173,000.
Gold was immediately responsive to the downbeat data, shooting up past the $1,390 level.
The unemployment rate, meanwhile, also released Friday, fell from 7.4 per cent to 7.3 per cent, a level not seen since 2008.
Although an end to the Federal Reserve’s $85 billion a month program of bond buying is inevitable, lacklustre results on jobs puts a brake on speculation that curtailing is in near sight.
The continuation of the central bank’s campaign of monetary stimulation has had much to do with the metal’s rally in recent days as the further the attenuation of quantitative easing recedes into the future, the greater store is set by the bullion itself, regarded as a hedge in inflationary times.
Anticipation of an end to the bond-buying – based on comments made by Fed Chair Ben Bernanke in June that September seemed like a likely month to begin tapering - has been pivotal in the erosion in value of the yellow metal, which has fallen spectacularly in value this year, dropping 17 per cent. Certainly the Federal Open Market Committee meeting due to take place from September 17-18 will have all eyes on it.
Turmoil in the Middle East has been a gift to gold, and indeed to many commodities, with the metal gaining back ground not seen in months in late August, during what seemed at the time like the eleventh hour before military intervention in Syria.
In other gold news, what seemed like widespread industrial strife brewing in South Africa – bringing with it unpleasant memories of last summer’s months of strikes and bloodshed - ended without incident, with the National Union of Mineworkers saying Friday that having accepted a wage offer, most striking gold miners had agreed to return to work.
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