Gold futures advanced to a three-week high as a government report on US jobs indicating a below-expectations growth got investors worried, bolstering the precious metal’s safe-haven appeal.
March added 192,000 jobs, less than last month’s figures and falling below the 200,000 positions estimated in a survey of economists commissioned by Bloomberg.
This week the Federal Reserve chair Janet Yellen said that the central bank needed to do more to check jobless rates. In 2013, gold fell to the lowest level since 1981, partly following speculations that the fed would cut its stimulus program.
Michael Gayed, Pension Partners LLC’s chief investment strategist said that the jobs data released today was below market consensus. “This is a very crucial number that the Fed looks at,” he added.
Gold for June delivery hit $1,304.60 an ounce after climbing 1.6% as of 11:40 am in New York.
The precious commodity advanced 70% from December 2008 to June 2011 when the Fed injected more than $2 trillion into the economy and reduced interest rates to a record low.
Till yesterday, gold gained 6.8% in 2014 as the global economic growth slowed and Russia’s annexation of Crimea triggered the worst US-Russia relations in the post-cold war era.
According to Reuters, gold for immediate settlement advanced to $1,304.73 an ounce, having gained 1.4% as of 11:20 am EDT. Bullion jumped as other financial markets showed volatility, with the S&P 500 index, which is a gauge of US stocks, dropping after early gains and US Treasury yields suffering a drastic plunge.
Analyst Axel Merk of Merk Funds said the payroll figures are impressive, but not exactly what policy makers had anticipated. He added that the US central bank will have to keep interest rates low for an appreciable period of time, a policy that would continue supporting gold.
The Friday’s US job data also adjusted figures for January and February upwards by 37,000.
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