Gold fell as U.S. jobless rate rose, reviving concern that a slowing economy will spark deflation and erode the appeal of precious metals as hedges against inflation. Platinum and silver also fell. Palladium gained. The U.S. unemployment rate climbed to 8.9 percent, the highest since September 1983, even as employers cut fewer jobs in April than in the previous month. About 539,000 workers joined the jobless ranks last month, compared with 699,000 in March, the Labor Department said today in Washington. Some investors buy precious metals as hedge against inflation. “The unemployment numbers are still very bad, indicating weak economic prospects near term,” Stephen Platt, a commodity analyst at Archer Financial Services Inc., said in a telephone interview from Chicago. “The market is still trying to set a little bit of a base here and may try to run higher if the deflation scenario is taken out. The economy is trying to turn a corner.” Gold futures for June delivery fell $1.20, or 0.1 percent, to $914.30 an ounce at 9:46 a.m. on the Comex division of the New York Mercantile Exchange. Before today, gold climbed 3.1 percent this week. Gold will probably rise to $950 an ounce to $960 an ounce within a “couple weeks,” Platt said. “The dollar is playing a role here,” he said. The U.S. currency declined to a one-month low against the euro following the jobless report as demand slipped for the safety of the greenback. Dollar Weakens The dollar lost as much as 0.9 percent against the European currency to trade at $1.3516 per euro in New York, the weakest since April 6. The euro fetched $1.339 yesterday. Silver futures for July delivery fell 8.5 cents, or 0.6 percent, to $13.945 an ounce in New York. The most-active contract slid 5.1 percent last month, while gold fell 3.7 percent. Platinum futures for July delivery slid 50 cents to $1,156.80 an ounce on the Nymex. Before today, the most-active contract advanced 5.6 percent this week. Palladium futures for June delivery rose $2, or 0.8 percent, to $243.70 an ounce in New York. Palladium jumped 13 percent this week before today. Most platinum and palladium are used in pollution-control devices for cars and trucks.

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