Gold Prices Inch Higher After Labor Report (Update 1)
NEW YORK ( TheStreet) -- Gold prices inched higher Friday after U.S labor data surprised economists with a much better-than-expected boost in employment.
Gold for February delivery added $3.70 to $1,705.50 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,706.80 and as low as $1,684.10 an ounce, while the spot price was increasing $2.60, according to Kitco's gold index.
The Bureau of Labor Statistics announced Friday that total nonfarm private payrolls jumped 146,000 in November as the unemployment rate edged down to 7.7% from October's 7.9%. Consensus among economists polled by Thomson Reuters expected 93,000 new jobs with the unemployment rate unchanged.
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Sica, though, said that he believed gold prices would stabilize and that the long-term outlook for the yellow metal has never looked better, in part because it doesn't appear the Federal Reserve will end its open, ended, mortgage-backed security purchases anytime soon. The policy is seen as inflationary, which makes gold a safe-haven hedge.
Silver prices for March delivery were shedding 3 cents to $33.08 an ounce, while the U.S. dollar index was climbing 0.20% to $80.41.
Gold prices have experienced a bit of volatility during the past two weeks as institutional investors sold off large holdings of the precious metal for final notice at the end of November as it dipped below $1,700 an ounce -- a level seen by many traders as a sell stop order to limit their losses.
Europe remained relatively quiet Friday. After European finance ministers and the European Central Bank managed to reach a deal with Greek bailouts, and Spain requested relief funds for its banks, confidence has slowly started to creep back into the region.
"The Europe issue is kind of off the plate right now," said Randy Frederick, managing director of active trading at Charles Schwab. "I don't think investors are even thinking about Europe right now until the fiscal cliff issue is resolved, and truth is, really, things have stabilized in Europe."
As proof that the economic environment has calmed in Europe, Frederick pointed to the fact that bond yields in Italy, Spain and Greece have all come down. He added, though, that the eurozone is still a long way from solving all its problems.
Gold investors may be looking ahead to next week when the Federal Open Market Committee -- the policy-making wing of the Federal Reserve -- makes its latest forecasts on Dec. 11.