GOLD PRICE NEWS – The gold price held firm near $1,655 per ounce Friday morning despite the better than expected U.S. employment report. The spot price of gold climbed to as high as $1,665.20 in overnight trading and remained in positive territory after the release of the September non-farm payrolls report. Silver prices headed north alongside the gold price, advancing $0.59, or 1.8%, to $32.59 per ounce.
The September jobs report showed that non-farm payrolls increased by 103,000 in September, well above the 60,000 consensus estimate among economists. The unemployment rate remained at 9.1%, in-line with expectations. The August non-farm payrolls figure was revised higher by 57,000, which also fueled optimism that the U.S. labor market is not deteriorating as significantly as many economists and investors had expected.
The broader financial markets reacted positively to the jobs data, with S&P 500 futures rising 11.00 points, or 1.0%, to 1,168.50. Cyclical commodities climbed as well, with copper futures up 1.7% at $3.30 per pound and crude oil higher by 0.8% at $83.25 per barrel.
Gold equities looked to open modestly higher in concert with the gold price, as the Market Vectors Gold Miners ETF (GDX) rose 0.8% to $56.71 per share in pre-market activity. Gold shares looked to build on yesterday’s gains, in which the GDX rallied 2.5% to $56.27 per share. Notable advancers included Agnico-Eagle Mines (AEM) and Goldcorp (GG), which posted gains of 3.0% and 3.9%, respectively.
Commenting on the outlook for the gold price, MKS Finance head of trading Afshin Nabavi stated, via Reuters, that “What you’re seeing is demand for physical metal continues to be very, very strong. China was off all this week. They’ll be back next week and I presume demand will only increase, so I think that is why the market has held so nicely around this $1,600 mark.”
Earlier this year the gold market “was extremely bearish in the dollar and extremely bullish on precious metals,” Nabavi added. “It’s not a one-way street all the time. We needed a correction and don’t forget we are talking about less than $300 in a commodity that was priced close to $2,000.”
He went on to say that “I still wouldn’t mind seeing it have a bit more of a correction on the downside first to clean up some of the spec length over the market.” Looking toward the end of 2011, Nabavi predicted that the gold price will resume its march toward $2,000 per ounce.
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