Gold closes slighly higher

Published September 7, 2008

NEW YORK, Sept 6: Gold ended a rollercoaster day slightly higher on Friday after soaring more than 2 percent as weak US jobs data caused the dollar to retreat from 11-month highs.

Gold bullion had been down in early trade. But then the US Labour Department reported a sharper decline in August jobs creation than experts had expected. The unemployment rate jumped to a five-year high.

After the report, the U.S dollar slid against the euro for the first time in seven sessions, and gold advanced to its session peak at $819.30 an ounce.

Gold retreated from session highs but spot gold remained up slightly at $801.10/813.10 an ounce in late trade compared with $796.15/797.75 at Thursday’s close.

COMEX December gold rose as high as $824.20 during the session as the dollar weakened after the payrolls report. Some investors took advantage of currency differentials in overseas markets; others bought gold as a safe haven against US economic weakness.

But the dollar edged up in late speculative buying, and December gold closed down 40 cents an ounce at $802.80 an ounce on the COMEX division of the New York Mercantile Exchange.

The Labour Department said 84,000 jobs were lost in August, a greater number than the 75,000 forecast by economists and the 60,000 lost payrolls in July.

With the price swings in both gold and the dollar, traders said some investors got caught behind the action.

Gold has fallen from close to $980 an ounce during the same period, with many analysts saying the dollar’s strength or weakness remains the number one factor in determining the direction for gold.

Increased physical buying by jewelers in India and the ME at lower price levels has supported prices after demand was thwarted earlier in the year due to gold’s record-breaking advance.—Reuters

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