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Gold and silver prices continued to diverge Friday as risk-averse investors jumped into gold while silver sagged on the sidelines.
Gold (-GC) for August delivery added $9.70 to settle at $1,542.40 at the Comex division of the New York Mercantile Exchange. Gold traded as high as $1,548.40 and as low as $1,524.90, while the spot gold price was up $7.80, according to Kitco's gold index.
After a dismal jobs report and an even worse market reaction, investors turned to gold a safe place to stash cash for the weekend. The unemployment rate rose to 9.1% in May, and the private sector added only 83,000 jobs. Nonfarm payrolls increased by just 54,000, compared with the 151,000 increase economists had predicted. April's numbers were also revised lower.
Although the markets were already pricing in some kind of bad news, the average number of jobs added during February, March and April was 230,000, so May's reading was particularly disappointing. Gold prices were benefiting from the rush to safety.
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Many traders on Thursday had also been considering shorting gold, or betting prices would fall, so some of Friday's rally might be due to a reversal of those positions into the weekend.
"I think a lot of people were anticipating that we would see a much better jobs report," says Phil Streible, a senior market strategist at Lind-Waldock, "so people were looking at the short side of the gold market. I think that's a very foolish decision."
The key level experts are watching is $1,550 an ounce. If the dollar is weak and gold powers through that level, then the metal could eye its intraday record of $1,577. But the psychological level could also prompt investors to take profits where they can.
On the flip side, silver (-SI) suffered Friday, as much of its value is tied to its role as an industrial metal, and this week's glum economic data left investors concerned about the pace of the global economic recovery. Prices settled down 1 cent at $36.19.
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"We had three weak ISM reports" from China, the EU and U.S., Streible said, "so the demand has come down (for silver), and I think that gold/silver ratio is going to continue to grind its way higher." A higher ratio reflects a lower silver price in relation to the price of gold.
Gold mining stocks were mixed Friday. Newmont Mining (NEM) was down 0.6% at $54.79, while Goldcorp (GG) was gaining 0.5% to $49.05. AngloGold Ashanti (AU) adding 0.9% at $45.41, but Barrick Gold (ABX) was falling 1.2% to $45.69.
http://money.msn.com/market-news/post.aspx?post=1a39100e-9566-44fe-aa0f-ed2d3db5430e&_nwpt=1
Gold (-GC) for August delivery added $9.70 to settle at $1,542.40 at the Comex division of the New York Mercantile Exchange. Gold traded as high as $1,548.40 and as low as $1,524.90, while the spot gold price was up $7.80, according to Kitco's gold index.
After a dismal jobs report and an even worse market reaction, investors turned to gold a safe place to stash cash for the weekend. The unemployment rate rose to 9.1% in May, and the private sector added only 83,000 jobs. Nonfarm payrolls increased by just 54,000, compared with the 151,000 increase economists had predicted. April's numbers were also revised lower.
Although the markets were already pricing in some kind of bad news, the average number of jobs added during February, March and April was 230,000, so May's reading was particularly disappointing. Gold prices were benefiting from the rush to safety.
*
Find a new broker and trade online
Many traders on Thursday had also been considering shorting gold, or betting prices would fall, so some of Friday's rally might be due to a reversal of those positions into the weekend.
"I think a lot of people were anticipating that we would see a much better jobs report," says Phil Streible, a senior market strategist at Lind-Waldock, "so people were looking at the short side of the gold market. I think that's a very foolish decision."
The key level experts are watching is $1,550 an ounce. If the dollar is weak and gold powers through that level, then the metal could eye its intraday record of $1,577. But the psychological level could also prompt investors to take profits where they can.
On the flip side, silver (-SI) suffered Friday, as much of its value is tied to its role as an industrial metal, and this week's glum economic data left investors concerned about the pace of the global economic recovery. Prices settled down 1 cent at $36.19.
*
Find out what Jim Cramer is buying now
"We had three weak ISM reports" from China, the EU and U.S., Streible said, "so the demand has come down (for silver), and I think that gold/silver ratio is going to continue to grind its way higher." A higher ratio reflects a lower silver price in relation to the price of gold.
Gold mining stocks were mixed Friday. Newmont Mining (NEM) was down 0.6% at $54.79, while Goldcorp (GG) was gaining 0.5% to $49.05. AngloGold Ashanti (AU) adding 0.9% at $45.41, but Barrick Gold (ABX) was falling 1.2% to $45.69.
http://money.msn.com/market-news/post.aspx?post=1a39100e-9566-44fe-aa0f-ed2d3db5430e&_nwpt=1
