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Gold Prices Rebound on Bernanke's Comments, Mixed Jobs Data

Strategic Insights

— 1 min read

Gold prices rose 0.4% Friday, or $5.30 per troy ounce, to $1,377.00 on the Comex division of the New York Mercantile Exchange, following Federal Reserve Chairman Ben Bernanke's comments about the slow pace of the U.S. recovery. The mixed jobs data released earlier in the day, showing an increase of 103,000 jobs in December but a higher-than-expected unemployment rate of 9.4%, contributed to the market's uncertainty.

Key Takeaways:

  • Gold prices rebounded 0.4% to $1,377.00 per troy ounce after Chairman Bernanke's comments, emphasizing the slow pace of the U.S. recovery.
  • The mixed jobs data, showing an increase of 103,000 jobs in December but a higher-than-expected unemployment rate of 9.4%, contributed to the market's uncertainty.
  • Analysts believe that the uncertain business outlook will boost gold prices as investors increasingly seek the yellow metal as a store of value at a time of volatile market conditions.
  • Sterling Smith, an analyst with Country Hedging, noted that the 9.4% unemployment rate is not a sign of a healthy labor market.
  • Tom Pawlicki, an analyst with MF Global, attributed the mixed data to seasonal retail hiring, which is only temporary.

Statistics:

  • Gold prices rose 0.4% to $1,377.00 per troy ounce on the Comex division of the New York Mercantile Exchange.
  • The February delivery contract was up $5.30, while the January delivery contract was up $5.80 per troy ounce.
  • The Labor Department's monthly non-farm payrolls report showed an increase of 103,000 jobs in December, lower than the 150,000 expected by economists.
  • Unemployment fell to 9.4% last month, the lowest level since May 2009, but the biggest decline in more than a decade.
  • The U.S. economy has been growing at a slow pace, with Bernanke predicting it may take four to five years for the job market to normalize fully.

Sources:

  • Dow Jones Commodities News via Comtex
  • Sterling Smith, analyst with Country Hedging
  • Tom Pawlicki, analyst with MF Global
  • Chairman Ben Bernanke, Federal Reserve
  • U.S. Senate Budget Committee
  • Tatyana Shumsky, Dow Jones Newswires
  • Howard Packowitz, Dow Jones Newswires

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