Gold, Silver Rise on U.S. Economic, Inflation Speculation

Gold gained for the third time in four days as U.S. hiring picked up in the past three months, signaling an improving economy that may fuel inflation as the Federal Reserve adds more stimulus. Silver also climbed.

Payrolls rose 157,000 in January and the previous two months were revised higher, government figures showed today. The jobless rate increased to 7.9 percent from 7.8 percent. The Fed said this week it will maintain monthly debt purchases.

“The payrolls number was very good, and the Fed’s stimulating the economy creates a boost, so the thinking is that this is inflationary,” Carlos Perez-Santalla, a broker at PVM Futures Inc. in Hoboken, New Jersey, said in a telephone interview. “The assumption is that with more money being dumped into the system, we’ll see quicker debasement of the currency.”

Gold futures for April delivery climbed 0.5 percent to settle at $1,670.60 an ounce at 1:41 p.m. on the Comex in New York. Silver futures for March delivery jumped 1.9 percent to $31.958 an ounce, the biggest gain among 24 raw materials in the Standard & Poor’s GSCI Spot Index.

The labor revisions added a total of 127,000 jobs to the employment count in November and December.

“The unemployment rate ticked up a bit, and the Fed has said they’ll hold rates low until that comes down,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates, said in a telephone interview. “The Fed will keep going on its mandate, and that’s helping gold.”

Gold has dropped 4.5 percent in the past 12 months. Credit Suisse Group AG said today in a report that a recovering global economy and tame inflation suggest that “downside risks” are building. The metal probably peaked in 2011, and a forecast for a record-high average in the third quarter “may prove to be too bullish,” the bank said.

On the New York Mercantile Exchange, platinum futures for April delivery increased 0.7 percent to $1,687.70 an ounce. Palladium futures for March delivery climbed 1.4 percent to $756.40 an ounce.

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