Gold rush resumes with another record high

chart_ws_commodity_metals_gold.top.pngClick chart to track other commodities By Ben Rooney, staff reporter


NEW YORK (CNNMoney.com) -- Gold prices jumped back above $1,400 an ounce Friday to settle at a fresh record-high as the U.S. dollar slid following a surprisingly weak report on the nation's job market.

February gold futures rose $16.90, or 1.2%, to settle at a nominal all-time high of $1,406.20 an ounce. Gold was last at such lofty levels early last month, when it hit a series of record highs in non-inflation adjusted terms.

The advance came after the Labor Department's monthly report showed that employers added 39,000 jobs in November. The tally was far below market expectations and followed a much stronger gain of 172,000 jobs in October. The unemployment rate unexpectedly rose to 9.8% from 9.6%.

The disappointing jobs data tempered hopes that the U.S. economy was gaining momentum, and put pressure on the nation's currency. The dollar was down over 1% versus both the euro and the yen. It fell 0.9% against the U.K. pound.

"The numbers this morning were a bit of a surprise," said Tom Pawlicki, commodities analyst at MF Global. "It's not consistent with other economic data we've seen lately, and suggests that we're continuing a rocky recovery."

Pawlicki said the report could lead Congress to expand policies aimed at stimulating the economy, such as extending unemployment benefits and renewing tax breaks. That could help support gold prices because investors are nervous about the sustainability of government spending, he added.

Adam Klopfenstein, senior market strategist at commodities brokerage firm Lind-Waldock, said gold is getting a boost from growing demand from retail investors in China.

But he said the metal is also benefiting from "common factors" such as the weak dollar and safe-haven demand. "I think people are uncomfortable in solid currencies going into the weekend and want to own a tangible asset," he said.

Gold and other commodities that are priced in dollars tend to gain value when the U.S. currency declines. It is also considered a "hard asset" that tends to hold value better than stocks and bonds.

Looking ahead, analysts expect prices for gold and other precious metals to continue rising into next year as the economic outlook remains cloudy and policymakers around the world look for ways to stimulate activity.

According to analysts at Deutsche Bank, gold is headed back above its November highs and could reach $1,445 an ounce in the near term.

"We believe the high level of macro-economic uncertainty in a low interest rate environment will continue to work in favor of new price highs across the complex," Deutsche bank said in a research report. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed3.94%4.13%
15 yr fixed3.04%3.08%
5/1 ARM3.55%3.40%
30 yr refi4.02%4.17%
15 yr refi3.10%3.14%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 16,614.81 215.14 1.31%
Nasdaq 4,419.48 103.41 2.40%
S&P 500 1,941.28 37.27 1.96%
Treasuries 2.24 0.03 1.40%
Data as of 9:28am ET
Company Price Change % Change
Regions Financial Co... 9.26 0.10 1.09%
Comcast Corp 52.19 0.89 1.73%
Applied Materials In... 20.78 0.71 3.54%
Kinder Morgan Inc 38.31 0.74 1.97%
Oracle Corp 38.35 0.55 1.46%
Data as of Oct 21

Sections

The midterm elections are around the corner, and the economy remains a top concern. With unemployment down and inflation low, why do people still feel the economy stinks? More

Yahoo was in the spotlight Tuesday as it released its third-quarter results, its first earnings release since the Alibaba IPO. More

Startups focusing on "ag tech," or agricultural technology, are gaining the attention of farmers and investors More

Foreign workers, lured by false promises of good jobs and benefits in America, soon find themselves enslaved in plain sight as victims of labor trafficking, a report from the Urban Institute finds. Here's how it can happen. More

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.