World Economy

Gold Climbs 2.4%, But Posts Weekly Loss

Gold Climbs 2.4%, But Posts Weekly LossGold Climbs 2.4%, But Posts Weekly Loss

Gold snapped a seven-day losing streak after data showed the US economy created fewer jobs than expected in November. But the precious metals still closed out the week 1.5% lower.

Gold for December delivery climbed $27.20, or 2.4%, to settle at $1,169.80 an ounce. December silver gained 30 cents to $15.71 an ounce.

The Labor Department said the U.S. generated a weaker-than-expected 214,000 new jobs in October, while the unemployment rate unexpectedly slipped to 5.8% from 5.9%. Analysts said the report was still solid, marking the ninth straight month the economy has added 200,000 jobs or more, a streak last accomplished in 1994.

On Thursday, gold settled at its lowest level since April 2010, dented by the prospects of a strengthening dollar and a lack of demand overseas. The fact that equities have knocked out new highs has kept investors from heading back into the supposed haven of gold.

Furthermore, Walter de Wet, head of commodities at Standard Bank, says the physical market is still crumbling.

“The ‘don’t catch a falling knife’ mentality is keeping physical guys on the sidelines,” he said. “Some interest is emerging, with gold forwards starting to tighten; however, the bulk of participants remain wary.”

  Options Trading

A gold put giving owners the right to sell December futures at $1,100 was the most-active option at 4,450 lots. The contract tumbled 59 percent to $3.30, the biggest loss since the debut in 2010.

This week, futures dropped 0.2 percent, the third straight decline. Holdings in global exchange-traded products backed by gold are at the lowest in five years, and traders surveyed by Bloomberg News have the most bearish outlook since March.

Gold’s 14-day relative-strength index in the previous five sessions was below 30, a level that suggests to some traders who study technical charts that prices may be poised to rebound. The gauge climbed to 36 today.

 In India

Gold prices jumped by Rs 650, its biggest gain since June 20, to close at Rs 26,450 ($430.7) per 10 grams in capital Delhi Saturday on emergence of buying by jewelers and retailers amidst a rebound in global markets.

Silver also recorded a significant recovery of Rs 650 to Rs 35,550 per kg on increased offtake by industrial units.

Bullion traders attributed the strong recovery in prices of precious metals to revival of buying at prevailing lower levels by jewelers and retailers amidst a rebound in global markets.