Gold breaks $1,100

The precious metal rallies after the U.S. government says the nation's unemployment rate surged to 10.2% in October.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Ben Rooney, CNNMoney.com staff reporter

Who should be the business leader of the decade?
  • Steve Jobs
  • Warren Buffett
  • Google’s Larry Page and Sergey Brin
  • Bill Gates
gold.jpg.mkw.gif
Click the chart for current gold prices.

NEW YORK (CNNMoney.com) -- Gold powered through $1,100 an ounce Friday after the U.S. government said the nation's unemployment rate rose more than expected last month, fueling demand for the metal as a safe haven.

December gold jumped $6.40 and settled at 1,095.70 an ounce after surging to an all-time high of $1,101.90 an ounce earlier.

Prices spiked after the Labor Department said the unemployment rate rose to 10.2% in October from 9.8% the month before. That marks the highest level since April 1983. Economists had forecast an increase to 9.9%.

Gold rally to continue. Gold is benefiting from a "flight to quality," said Adam Klopfenstein, senior market strategist at commodities brokerage firm Lind-Waldock.

He said investors who were expecting an economic recovery "threw in the towel" after the jobs report. At the same time, investors who think the economy will continue to worsen "want to own something tangible."

"It looks like the market is giving gold the green light regardless of what's going on in equities or the currency markets," he said.

Gold could come under pressure as investors book profits following the push above $1,100, but the market has a "bullish fundamental case," Klopfenstein said.

Prices have soared 5% this week amid speculation that overseas central banks may be moving toward buying more gold as they look for ways to reduce their exposure to the U.S. dollar -- the traditional reserve currency of choice for many of those foreign central banks.

The weak greenback also makes commodities that are priced in dollars, such as gold and crude oil, more appealing for investors using other currencies. As a result, gold often rises when the dollar weakens.

Many analysts say this week's rally has been driven by speculative investors who trade based on momentum.

"The gold market is something a lot of speculative and institutional investors are looking at," said Adrian Ash, head of research BullionVault.com. "You've got low interest rates and horrible economic data, for a lot of institutional investors gold is a no brainer."  To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
Best-loved cars in America These cars and trucks topped J.D. Power's APEAL survey, which measures how much owners like their new vehicles. More
America's most powerful cars A new 'horsepower war' has erupted among U.S. automakers and these are the most potent weapons in their arsenals. More
A sampling of beers being made with traditional Latin flavors A small but growing number of craft breweries are including passion fruit, Mexican cinnamon and other traditional Latin flavors. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.