Bank of England Gives “Systemic Crisis” Warning, Germany’s Merkel says Eurozone “Will Take Years” to Solve Debt Problem, South Korea Adds to Gold Reserves
By: Ben Traynor
London Gold Market Report
U.S.DOLLAR Gold Bullion prices eased back from a week’s high of $1760 an ounce Friday lunchtime in London – straight after the publication of US jobs data – before appearing to bounce off $1750.
Silver prices also fell back, after hitting a week’s high of $33.67 per ounce.
Nonfarm payroll data published by the US Bureau of Labor Statistics Friday show that the US economy added 120,000 jobs in November – exactly in line with market expectations.
The US unemployment rate meantime fell to 8.6% – down from 9.0% in October.
Stock markets opened strongly on Friday morning – with the FTSE 100 in London up around 1.6% by lunchtime and Germany’s DAX gaining 2.0% – while commodities also gained and US Treasury bond prices fell.
“Recent US data have been slightly more optimistic than what has been factored into the market,” said Neil Jones, London-based head of European hedge-fund sales at Mizuho Corporate Bank, speaking before the nonfarm payroll release.
“That’s helping risk…the market is in the process of reducing its risk-off positions.”
Despite its slight drop following the nonfarm release, gold bullion looked on course for its biggest weekly gain since October – having risen nearly 4% since last week’s close.
“The market is betting on some kind of announcement from Europe,” reckons Saxo Bank analyst Ole Hansen.
“[Investors are] looking for the liquidity button in Europe to be pressed. That will mean high inflation, and that is giving gold the impetus it has been lacking of late.”