On Friday, gold (NYSEARCA:GLD) futures for December delivery increased $11.70 to settle at $1,747 per ounce, while silver (NYSEARCA:SLV) futures fell 7 cents to settle at $32.62. For the week, gold and silver gained 3.6% and 5.1%, respectively.
The jobless rate declined to 8.6%, the lowest since March 2009. Such a steep decline was unexpected, as employers added fewer workers than projected in November and earnings eased. Payrolls climbed 120,000, with more than half of the hiring coming from retailers and temporary help agencies. Many new jobs may only be seasonal — January figures will be the true test of whether the labor market is improving. However, the average duration of unemployment increased to a new record of 40.9 weeks from 39.4 weeks. The unexpected drop in the unemployment rate can largely be attributed to another decline in the labor force participation rate. The rate decreased from 64.2% to 64%, the lowest since 1983.
Investor Insights: Why is Gold Finding Support At This Level?
The SPDR Gold Shares ETF (NYSEARCA:GLD) gained .15%, while the iShares Silver Trust ETF (NYSEARCA:SLV) edged .50% lower in afternoon trading. Gold miners (NYSEARCA:GDX) such as Barrick Gold (NYSE:ABX) and Yamana Gold (NYSE:AUY) both declined about 2.90%, while Newmont Mining (NYSE:NEM) fell 1.80%. Silver miners (NYSEARCA:SIL) such as Silver Wheaton Corp. (NYSE:SLW) and Coeur d’Alene Mines (NYSE:CDE) declined 2.20% and .58%, respectively. However, First Majestic Silver (NYSE:AG) edged .42% higher.
The central bank of South Korea announced that it purchased 15 tons of gold in November, which brings its gold reserves to 54.4 tons. The purchase shows the changing sentiment towards the safety of fiat currencies. Earlier this year, South Korea’s central bank purchased gold for the first time in 13 years when it bought 25 tons of it in June and July.
Lee Jung from the central bank said, “The Bank of Korea purchased gold last month in a bid to diversify its portfolio of foreign exchange reserves. Demand for gold is increasing as a hedge against global inflation amid the persistent sovereign debt crisis in Europe.”
In response to a letter by fund manager Eric Sprott, Coeur d’ Alene Mines, the largest US based primary silver producer, said it would consider holding some of its reserves in silver at a future point. CEO Mitchell Krebs told Mining Weekly Online that the miner would be in the position to consider the move in the second half of 2012. Mr. Sprott reasons, “Given the current environment, we see much greater risk holding cash in a bank than we do in holding precious metals. And it serves to remember that thanks to 0% interest rates, banks don’t pay their customers to take on those risks today.”
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