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Gold edges higher as weak
U.S. payrolls keeps pressure on dollar
Thomson
Financial
Monday, April 7, 2008
Gold edged higher in early London trade as the dollar
remained under pressure following weak U.S. payrolls data on Friday.
The U.S. labour department reported non-farm employment fell
by 80,000 jobs in March and concerns over the state of the world's
largest economy and the depreciation of its currency remain uppermost
in trader's minds. Gold has been boosted by the ongoing financial
turmoil because it acts as a store of wealth and as an alternative
investment to the U.S. currency.
'U.S. non-farm payrolls data cemented the view that the U.S.
is slowing significantly, and that the U.S. dollar therefore has
little prospects for gains in the short term,' said BNP Paribas
(other-otc: BNPQY.PK - news - people ) analyst David Thurtell.
(Article continues below)
At 9.56 a.m., spot gold was trading at $913.73 an ounce against
$909.80 in late New York trades on Friday.
Elevated oil prices are also providing support, with gold investors
buying bullion to hedge against rising inflation. Oil rose to
a week high close of $107 today.
While gold has recovered some ground since touching a two month
low of $872.40 an ounce last week, investors are still wary of
backing the precious metal to move back up to the $1,000 level
seen in March. Bargain hunting from jewellers has played a role
in moving the metal back above $900, but physical buying interest
has been limited at higher levels.
James Moore at TheBullionDesk.com said gold prices were likely
to remain volatile as the metal builds a more stable base around
the $900 level, adding that the recent financial turmoil could
force some investors to close out their positions in precious
metals.
Full
article here.
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