Gold Prices Bounce Back After Non-Farm Payrolls Data; Silver Prices Rise Sharply
Gold prices recovered sharply on Friday after the Labor Department’s dismal non-farm payrolls data reignited fears over state of the U.S. economy, triggering sell-off in riskier assets with investors taking refuge in safe haven assets. Silver prices also rose sharply on Friday.
In addition, unexpectedly weak job numbers have raised expectations that the Federal Reserve will be now reluctant to halt or squeeze the scale of its ongoing quantitative easing program any time soon, which will be gold-supportive in the long run. Rampant currency printing stokes fears of inflationary pressure which in turn pushes up the demand for safe haven bets such as gold.
At last check, U.S. gold futures for June delivery leaped 1.77% to $1,579.90 an ounce while spot gold climbed 1.73% to $1,579.57. At last check, the SPDR Gold Trust (ETF) (NYSE: GLD) ended the day 1.66% higher at $152.79.
Earlier on Thursday, gold futures tumbled to 10-month low to hit $1,539.74 an ounce level as investors sold gold in droves to cover losses suffered in equity markets on Wednesday.
The Labor Department said that non-farm payrolls rose by only 88,000 in March compared to economists’ expectation of 200,000 new job additions. Earlier during the week, the Automatic Data Processing’s (ADP) private sector job data and Labor Department’s weekly first time jobless claims data also indicated that the U.S. labor market is stagnating.
“The data took everybody by surprise and gold jumped on that number and that tells us the economy is still pretty soft, suggesting that the Fed will continue with its bond buying program as scheduled,” said ,Societe Generale analyst Robin Bhar in a not, according to Reuters.
The dollar also weakened against most major traded currencies on Friday, making dollar dominated commodities cheaper for dealers trading in currencies other than the U.S. dollar.
In some other precious metal markets, silver futures gained 1.82% to $27.26 an ounce. Platinum futures climbed 1.38% to $1,538.80 an ounce while palladium futures inched up 0.08% to $726 an ounce.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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