MW: Gold tops $940 as jobless data fuel safety buying
Gold futures rose Friday to above $940 an ounce as investors sought safety in the metal after data showed the U.S. February unemployment rate soared to the highest level in more than 25 years.
Gold for April delivery rose $15.10, or 1.6%, to $942.90 an ounce on the Comex division of the New York Mercantile Exchange. A weaker dollar also weighed on gold's trading.
U.S. nonfarm payrolls shrank by 651,000 in February, the Labor Department reported Friday. The unemployment rate soared to 8.1%, the highest level since December 1983. Economists had expected job losses of 650,000 and an unemployment rate of 8%.
Over the past four months, the U.S. economy has lost more than 2.5 million jobs. See full story.
The bad economic data triggered "renewed safe-haven demand into precious metals," wrote James Moore, a precious metals analyst at TheBullionDesk.com. "However with cash liquidity still tight and given the volatile moves in equities, further gains could be limited."
Gold had tumbled 9% in eight straight sessions after it topped $1,000 an ounce on Feb. 20. Profit-taking and forced liquidation had contributed to the slump, analysts said, as some investors were forced to sell gold to cover their losses in other markets.
After Friday's gain, gold is poised to end the week almost flat.
Also weighing on gold prices Friday, the U.S. dollar fell against its major rivals, following the weak jobs report. The dollar index fell 0.3% to 88.009. A weaker dollar tends to push up dollar-denominated gold prices.
Morgan Stanley analysts said Thursday in a report that they expected gold prices will average $1,000 this year, up from the $900 they predicted earlier this year.
Gold holdings in SPDR Gold Shares, the largest gold exchange-traded fund, again stood at a record high of 1,029.29 tons on Thursday, unchanged for a sixth day, according to the latest data from the fund.
In other metals trading Thursday, March copper rose 3.3% to $1.7005 a pound. March silver rose 2.6% to $13.445 an ounce, while April platinum added 1.2% to $1,077.10 an ounce and the March contract for sister metal palladium was flat at $199.80 an ounce.
