Gold futures rallied Friday as a negative jobs report was thought to be a catalyst for additional U.S. economic stimulus coming sooner rather than later.
Other metals futures tracked gold higher on the Comex division of the New York Mercantile Exchange.
Gold for December delivery advanced $24.80, or 1.5%, to $1,730.50 U.S. an ounce, after having gained 0.7% on Thursday as European Central Bank chief Mario Draghi detailed plans to help struggling euro-zone economies through bond purchases.
U.S. nonfarm payrolls rose by 96,000 in August, the U.S. Labor Department reported earlier Friday. This came in well below market estimates around 125,000 and paled compared to July’s revised growth of 141,000 jobs.
The nation’s unemployment rate fell to 8.1%, down from 8.3% in July, as more people checked out of the workforce.
Federal Reserve Chairman Ben Bernanke had expressed concerns about the U.S. labour market during a speech in Jackson Hole, Wyo., last week, boosting hopes that he will push the quantitative-easing trigger at the central bank’s policy meeting next week.
Gold thrives on talks of more easing as it is seen as store of value and a shield against currency debasement. The dollar fell against both the euro and Japan’s yen in Friday’s foreign-exchange trading.
Analysts at Commerzbank said in a note a disappointing jobs report could spur Fed action next month.
Gold so far has gained about 2.6% on the week.
Gold-backed exchange-traded funds and gold miners got a boost from the metal’s rally, with shares of Freeport McMoRan Copper & Gold, one of the world’s top miners, trading up 5.5%. Barrick Gold ABX also rose, up 2.4%.
The SPDR Gold Trust , the largest gold-backed ETF, rose 1.7%. The ETF’s holdings has held steady in recent days, with 1.293 metric tons in the trust, from 1.289 metric tons in the prior week and 1.254 in early August.
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