12:27 PM EDT April 7, 2008by Polya Lesova, MarketWatch
NEW YORK (MarketWatch) — Gold futures rallied along with other commodities Monday, as worries about the health of the U.S. economy drove investment demand for the precious metal.
Gold for June delivery rose $17 at $930.20 an ounce on the New York Mercantile Exchange.
“I believe you’re seeing a flow back into gold and commodities as Friday’s data reminded us once more that we are not out of the woods and things are due to get worse before they get better,” said Zachary Oxman, a senior trader at Wisdom Financial.
“The tone you will find this week is one of strength, moving gold back to the mid 900′s,” Oxman said. “The market will benefit from continued builds to the long side.”
The Reuters-Jefferies CRB index, a benchmark barometer gauging the prices of major commodities, surged 1.6%.
On Friday, gold closed with a modest gain, as the dollar slipped following a report that March employment declined more than expected, another sign that the U.S. economy may have gone into a recession.
The Labor Department reported that nonfarm payrolls fell by a steeper-than-expected estimated 80,000, the largest decline since March 2003. For the week, however, gold futures posted a loss of $23.30.
“Friday’s data again served to create recessionary fears in the U.S., and will continue to draw interest from longer-term investors looking to offset recessionary/inflationary fears, and factor in some form of safe-haven protection,” James Moore, an analyst at TheBullionDesk.com, wrote in a research note.
“In the short term, though, we expect gold to remain in a volatile mood,” Moore added.
On the currency markets, the U.S. dollar was higher against major counterparts, finding support as Asian equity markets started the week on a positive note. The dollar index, which tracks the performance of the greenback against other currencies, gained 0.3% at 72.16.
The firmer tone in equities translated into renewed risk appetite for higher-yielding currencies, analysts said, in turn pressuring low-yielding units such as the Japanese yen and the Swiss franc.
Also on the Nymex, May silver futures gained 41 cents at $18.16 an ounce and July platinum futures rose $16.30 at $2,046.80 an ounce.
June palladium futures surged $16.60 at $461 an ounce, and May copper futures gained 4 cents to $4 a pound.
Capital Gold Group, Gold Group, IRA Gold, Gold IRA, Gold coins, gold prices, gold, gold bullion, gold investments
