Gold price nears all-time high as jobs report renews concerns
Bad news for unemployed Americans is good news for gold mavens.
The price of gold surged Friday, nearing its all-time high reached last month, after a disappointing November jobs report renewed concerns about the strength of the U.S. economic recovery.
Far from the 150,000 new jobs that economists expected, nonfarm payrolls rose by a mere 39,000 and the jobless rate climbed to 9.8%.
That helped spark a new rush into gold, as some investors sought out its perceived safety. A slump in the dollar’s value Friday also underpinned demand for gold because the metal is widely viewed as an alternative to paper currencies.
The December gold futures contract jumped $16.90 to $1,405.40 an ounce, just shy of the record closing price of $1,409.80 reached Nov. 9. Silver prices also rocketed, rising 70 cents to $29.24 an ounce, a new 30-year high before adjusting for inflation.
The jobs report may simply have been cover for traders to resume the aggressive rally in gold that has been in place for much of this year. The metal is up 28% year to date.
China also played a role in Friday’s gain: The government revealed Thursday that the country imported almost 210 metric tons of gold in the first 10 months of this year, far outpacing expectations.
Investors worldwide have flocked to gold for a variety of reasons this year, some of them seemingly contradictory.
The metal has risen in periods of concern about the global economy, but also in times of renewed economic optimism when investors were willing to take greater risks, said Jeff Friedman, senior market strategist at commodities trading firm Lind-Waldock in Chicago.
“You’ve got different players constantly buying gold,” he said.