Gold Price Firm After Jobs Data Beats

GOLD PRICE NEWS – The gold price climbed $10.20 to $1,657.85 per ounce Friday morning, holding firm despite a stronger than expected jobs report in the United States. The Labor Department reported a gain of 117,000 nonfarm payrolls versus an estimate of 85,000 according to a Bloomberg survey of economists. The unemployment rate fell 0.1% to 9.1%. The weak jobs picture has been a key area of focus for the U.S. Federal Reserve. Tepid jobs data, notwithstanding this stronger than anticipated report, has been a key driver of rising speculation that Chairman Bernanke may be preparing for a third round of quantitative easing. Gold prices are advancing as traders and investors add to positions in the yellow metal via physical gold, gold futures, and exchange-traded funds backed by gold bullion.

The gold price reached another new all-time high yesterday morning before turning sharply lower. After touching a new record high of $1,681.70 per ounce, the spot price of gold tumbled over $30 as broad-based liquidation in global markets weighed on the yellow metal. The Global Precious Metals Team at TD Securities noted that “Gold maintained safe haven status for quite some time yesterday and posted a new all time high spot price above $1680.00 but the ferocity of the sell-off in other markets spilled over as the day wore on.” The gold price ultimately settled lower by $14.57 at $1,647.57 per ounce, while the SPDR Gold Trust (GLD) – a proxy for the price of gold – fell 0.5% to $160.63 per share.

Silver’s trajectory mirrored that of the gold price, as the precious metal initially rose as high as $42.29, but finished the day steeply lower, off 7.4% at $38.66 per ounce. Gold and silver equities posted substantial losses as the Philadelphia Gold & Silver Index (XAU) dropped 6.0% to 197.12. Barrick Gold (ABX) and Goldcorp (GG), the world’s two largest mining companies, retreated 5.9% and 6.0%, respectively.


Gold Spikes as Stock Market Sinks


Worries over a double-dip recession in the U.S. and fresh sovereign debt concerns in Europe weighed on risk appetites across the globe. The S&P 500, which declined 2.30 to 1196.40 Friday morning, plunged 4.8% yesterday – leaving the benchmark index lower by 11% in the past 11 trading sessions. Oil fell 5.8%, helping to erase all of the 2011 gains in the Reuters-Jefferies CRB Index. The CBOE Volatility Index (VIX), a widely-followed gauge of “fear” in the marketplace, spiked 35% to 31.66.

Speculation that Chairman Bernanke and the U.S. Federal Reserve will launch a third round of quantitative easing to restart the waning recovery helped keep gold buoyant amid the carnage. Gold gained $18.25 to $1,665.90 per ounce Friday morning after a 0.8% drop during Thursday’s volatile session.

Investors and traders awaited the U.S. employment report, scheduled to be released at 8:30m eastern time this morning.

Dow Plunges 512 Points, Gold Breaks Below $1,655


U.S. equity markets plunged Thursday, as the Dow Jones Industrial Average (DJIA) dropped 512.76 points to 11,383.68. The 4.3% retreat in the DJIA marked its worst single-day decline since a 7.7% plummet on December 1, 2008.

Gold futures, which this morning rallied to a new all-time high of $1,684.90 per ounce, headed south in mid-day trading while the U.S. dollar extended its gains. COMEX gold futures, per the December contract, hit an intra-day low of $1,642.20 and held below $1,655 later this afternoon.

The U.S. Dollar Index (DXY), a trade-weighted composite of the greenback versus the world’s largest fiat currencies, advanced 1.8% to 75.199.

Gold equities sunk alongside the broader market, as the AMEX Gold Bugs Index (HUI) fell 5.6% to 531.83. Barrick Gold (ABX), the world’s largest gold producer, plunged 5.9% to $46.21 per share. Newmont Mining (NEM), the only gold stock included in the S&P 500, sunk 4.7% to $54.44 per share.