Gold News

Gold Ends Week Unchanged as Central Banks Sign New Sales Agreement

From Chris Mullen at GoldSeek.com...

Gold traded mostly lower in Asia and London on Friday, rising to see a $3.90 gain at $964.90 before better than expected US jobs data was released at 08:30 EST.

The Bureau of Labor Studies net birth/death adjustment for new businesses added 32,000 payrolls to July's data. Overall, the Unemployment Rate finally ticked down for the first time in 15 months.

The average work week was up, and average earnings also beat expectations. Payrolls have still fallen for the past 19 straight months and about 6.7 million jobs have been lost since December of 2007.

Oil opened higher on that better than expected jobs data, but it soon erased its gains and turned lower after the US Dollar index reversed its recent trend of only rising on cash-raising and safe-haven moves, and instead rose today on the improving economic outlook of the US.

Most of the Dollar index’s gains came versus the Japanese Yen, however, as traders sold the Yen in order to speculate on higher yielding assets.

Treasuries fell markedly and the Dow, Nasdaq, and S&P rose over 1% on the better than expected jobs data that raised hopes over the future health of the economy.

The Gold Price quickly tumbled to $953 as the Dollar and stocks rose on the jobs data, bouncing only to fall off into the close again and end with a loss of 0.4% for the day.

The 16 signatories of the 2004 Central Bank Gold Agreement meanwhile signed a new 5-year deal, agreeing to cap their annual gold sales at 400 tonnes – down from the previous Agreement's ceiling of 500 tonnes.

For the week, the Gold Price added 0.3%. Gold in Euros also rose slightly, up to €673.30 an ounce.

Silver erased overnight losses early Friday and climbed to see a gain of $0.23 at $14.89 a little after the New York opening. It also fell back for most of the rest of trade, ending the day with a gain of 0.2%, up 5.2% for the week.

Gold Mining and silver equities fell over 2% in the first hour of trade before they rebounded a bit midday, but they then fell back off in late trade and ended with about 2% losses on the day. They were unchanged for the week.

Next week’s economic highlights include US Productivity, Unit Labor Costs, and Wholesale Inventories on Tuesday, the Trade Balance, Treasury Budget, and a FOMC Rate Decision on Wednesday, Export and Import Prices, Initial Jobless Claims, Retail Sales, and Business Inventories on Thursday, and CPI, Capacity Utilization, Industrial Production, and Michigan Sentiment on Friday.

Chris Mullen is chief content manager of the GoldSeek family of websites, a leading source of gold news, comment and mining-stock data for private and institutional investors.

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