Gold Set to Extend Weekly Advance as US Unemployment May Rise – Bloomberg

2 Nov

Gold is poised to gain before a report that may show U.S. unemployment increased last month, indicating that the world’s largest economy is struggling to pick up. Silver is set for the best week since September.

Gold for immediate delivery was little changed at $1,716.35 an ounce at 8:39 a.m. in Singapore. It’s set to advance 0.3 percent this week in the first climb since Oct. 5. Bullion for December delivery was little changed at $1,716.60 an ounce on the Comex, also up 0.3 percent this week.

Data today may show while U.S. employers took on 125,000 workers in October, that wasn’t enough to keep the jobless rate from rising to 7.9 percent from 7.8 percent, according to the median forecast of economists surveyed by Bloomberg. The Federal Reserve said Oct. 24 it will maintain $40 billion in monthly purchases of mortgage debt and probably hold interest rates near zero until mid-2015 to spur economic growth and cut unemployment.

A higher jobless rate “would suggest the U.S. is a little weaker than anticipated and that could lead to a weaker U.S. dollar,” said David Lennox, a resource analyst at Fat Prophets in Sydney. The metal usually trades counter to the U.S. currency, which traded little changed against a basket of six counterparts.

Holdings in exchange-traded products backed by bullion expanded to a record 2,588.44 metric tons yesterday, according to data tracked by Bloomberg.

Applications for jobless benefits fell 9,000 to 363,000 in the week ended Oct. 27, the fewest in three weeks, the U.S. Labor Department said yesterday. Economists forecast 370,000 claims, according to the median estimate in a Bloomberg survey.

Rosengren’s View
Federal Reserve Bank of Boston President Eric Rosengren said yesterday the Fed should buy bonds until the jobless rate is 7.25 percent and hold the target interest rate near zero until hitting 6.5 percent unemployment. The Federal Open Market Committee repeated on Oct. 24 that it would continue asset purchases until the labor market improves “substantially.”

Spot silver gained as much as 0.3 percent to $32.35 an ounce and was at $32.33. Prices are up 0.7 percent this week, heading for the best week since Sept. 14.

Platinum for immediate delivery dropped 0.2 percent to $1,568.50 an ounce, paring the first weekly gain in four. Palladium fell 0.4 percent to $611 an ounce, trimming the week’s advance to 2.2 percent.

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