JOBS REPORT, EURO ZONE OPTIMISM BOOSTS GOLD
Gold traded higher on Friday on an encouraging jobs report from the United States and signs that euro zone policymakers are closer to resolving the debt crisis. The U.S. unemployment rate fell to a 2-1/2 year low of 8.6 percent in November and companies stepped up hiring, suggesting the economy is possibly gaining momentum.
Also boosting gold prices was widespread investor expectation that a European summit next week could bring workable solutions to the euro zone sovereign debt crisis. France and Germany are expected to outline joint proposals for the meeting on Monday. (Reuters, 12/2/11)
An additional supportive factor for gold was the news that Bank of Korea bought 15 tons of gold in November. "Even after this purchase, gold accounts for less than 1% of the country's currency reserves, meaning that further purchases are likely to follow," wrote Commerzbank. Central bank purchases reached 148.4 tons by the end of the third quarter and could reach 450 tons by year's end, according to the World Gold Council. This is a big transition from a few years ago when central banks were net sellers of gold. (TheStreet, 12/2/11)
†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.
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