Gold Reacts to ECB Announcement, Jobs Data
Unemployment Rate Declines
Thursday, ECB President Mario Draghi declared that the Eurozone economy would most likely continue shrinking in 2013, and growth remained risky.
Gold, which had settled near $1,693/ounce, rose sharply on Thursday and continued to rise on Friday after U.S. unemployment stats showed more job growth than expected. Thusday gains were tempered by losses in the euro and crude futures.
Spot gold rose to $1,699.05/ounce by 3:34PM on Thursday, and U.S. COMEX futures for February delivery rose to settle at $1,701.80. Trading volume was 25 percent lower than the 30-day average, according to Reuters data.
Spot prices rose above $1,700 on Friday to $1,701.60. Futures for December delivery hit $1,703.20.
Even as the ECB declaration caused shifts in the gold market, investors await a Federal Reserve policy meeting set for next week. Hanging over all of this is the increasingly grim shadow of the fiscal cliff.
The President and the Republicans are still facing off over that, with neither side apparently willing to compromise its core positions.
Overall, gold remains firmly in safe-haven status due to all these uncertainties, and the SPDR Gold Trust (NYSE: GLD) holdings continue to stay at record highs.
Over in India, a strong rupee meant the world’s largest consumer of bullion continued to demonstrate healthy demand for the precious metal.