Gold Rebounds as Dollar Drop Revives Demand for Metal as a Haven
Gold rose for the first time in four days after a report showed U.S. employers added fewer jobs than expected in December, sending the dollar lower and boosting the appeal of the precious metal as an alternative to the currency.
Gold is still headed for the biggest weekly loss since October as reports this week signaled an improving labor market and expansion in manufacturing and services. Gold advanced 30 percent in 2010 and touched a record last month on concern that a rebound from a global recession would falter. Before today’s jobs report, the metal slipped to a five-week low.
“The jobs number was disappointing for the dollar and helped gold climb back,” said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago.
Gold futures for February delivery rose $5.10, or 0.4 percent, to $1,376.80 an ounce at 11 a.m. on the Comex in New York. A close at that price would mark a 3.1 percent slide for the week, the most since Oct. 29. Earlier, the metal fell to $1,352.70.
The unemployment rate fell to the lowest level since May 2009 while employers added 103,000 jobs, below the median forecast of 150,000 in a Bloomberg survey. The U.S. Dollar Index fell as much as 0.1 percent, heading for its first decline this week.
Federal Reserve Chairman Ben S. Bernanke said the decline in the unemployment rate is likely to be slow even with a pickup in U.S. growth this year, signaling no change in the central bank’s monetary stimulus.
“The data isn’t strong enough to create inflation nor weak enough to throw us back into a recession,” said Adam Klopfenstein, a senior market strategist at Lind-Waldock in Chicago. “You have to play both sides of gold now.”
Silver futures for March delivery advanced 13.4 cents, or 0.5 percent, to $29.26 an ounce on the Comex. The metal jumped 84 percent in 2010.
Palladium futures for March delivery fell 90 cents, or 0.1 percent, to $762 an ounce on the New York Mercantile Exchange. The price surged 96 percent last year. Platinum futures for April delivery rose $10.30, or 0.6 percent, to $1,745.40 an ounce.
To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.
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