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Strategies & Market Trends : Natural Resource Stocks -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (4370)	12/5/2003 12:41:47 PM
From: Ruffian	Read Replies (2) \| Respond to of 108616

Gold Hits $407 as Jobs Data Dents Dollar Friday December 5, 12:29 pm ET NEW YORK (Reuters) - New York gold futures extended their rally to levels not seen in almost 8 years on Friday, after a disappointing report on U.S. employment weakened the dollar and made the precious metal cheaper for overseas investors. ADVERTISEMENT Seen as both a currency and a hard asset that can hold its value when paper investments lose money, gold has risen 15 percent this year, benefiting from dollar disinvestment and worries about geopolitical instability. Recovering from early selling at the COMEX division of the New York Mercantile Exchange, gold for February delivery touched $407.30 an once, its highest since February 1996, after London precious metals trading wrapped up for the day. It beat the previous high at $407.00 on Tuesday by 30 cents. Gold investors have been steadfast buyers every time the price weakens. The $400 level become a rock solid support level, having been a tough psychological barrier just weeks ago. "There is something freaky going on," said a bullion dealer. "It's just more investor buying." At 12:20 a.m. EST (1720 p.m. GMT), February gold was up $2.30 at $406.50 an ounce, still well above the $400.50 low hit in an early round of profit-taking by investment banks. Spot gold was quoted at $405.10/5.85, up from London's afternoon fix at $402.40 and Thursday's New York close at $402.15/85. There was a slight lag in the reaction by currency and precious metals markets to a government report showing U.S. nonfarm payrolls rose a modest 57,000 in November, well short of the 150,000 expected by financial markets. The five-year-old euro rose in late-morning activity to another lifetime high at $1.2169, making dollar-priced gold more affordable for European investors. Some investors were disappointed because they had bet that the labor market had completely turned the corner with the U.S. economy. But they could take solace from a fall in the unemployment rate to 5.9 percent from October's 6.0 percent. They also got more good news on the U.S. manufacturing sector Friday, with a 2.2 percent jump in October factory orders, the fifth increase in 6 months. Instead of eroding the safe-haven appeal of gold, the specter of an overheating economy has bolstered the precious metal as an inflation hedge.