Commodities

Gold Up on Dour Data

11/02/06 - 03:04 PM EST

Simon Constable

Updated from 11:28 a.m. EST

Gold streaked higher again Thursday with traders betting that more gloomy economic data will undermine the greenback.

New data from the Labor Department show that last week's initial claims for unemployment insurance rose 18,000 to 327,000, compared with analysts' forecasts of 310,000.

Data for the prior period were revised upward to 309,000 from 308,000.

Also published by the same agency were data showing that productivity growth came to a standstill in the third quarter compared with consensus forecasts for growth of 1.1%. In addition, the prior period's figures were revised down to 1.2% from 1.6%. Unit labor costs, a key measure of inflation, rose 3.8%, above expectations of a 3.4% increase.

Without sustained growth in productivity, increases in labor costs tend to get passed on to consumers in the form of higher prices for goods and services.

Those reports were accompanied by generally weaker-than-expected October sales data from retailers such as Wal-Mart WMT and Target TGT.

"After two weeks of nearly universally below-consensus economic reports, we have entered a pessimists' paradise," writes Michael Darda, chief economist at MKM Partners in Greenwich, Conn. "In other words, the recession trade is back on."

And that looks like great news for gold, as investors in the yellow metal tend to thrive on strife and turmoil.

Bullion market watchers seem to be anticipating a dollar slide, although reaction in the spot market was mixed, with the dollar buying 117.14 yen, up from 117.04 yen late Wednesday.

The greenback was down against the euro, which was recently trading at $1.278, down from $1.2755 previously.

The varied reaction in the foreign-exchange markets didn't hold the gold bulls back, with December-dated contracts closing up $8.50 at $627.80 an ounce on the Comex division of the Nymex.

Previous «
1 2

Headlines & Perspectives

Commodities

Go To Section Home

Next Story

Crude Slides Again


11/02/06
Crude Slides Again

Oil futures fall below $58 amid skepticism about OPEC production cuts and rising inventories.


11/01/06
Inventories Up, Crude Dips

The DOE says oil stockpiles rose by 2 million barrels last week.


11/01/06
Gold Gains as Stocks Slide

Weak economic data give the yellow metal a boost even as the dollar rebounds from early losses.



08/05/08
Three Internet Stocks That Could Double

These forgotten Internet stocks are being accumulated by hedge funds.


08/15/08
The Five Dumbest Things on Wall Street

Raspberries for Apple; You'll be sorry, UBS; Fortress or Fort Knox? Wholly unappetizing Foods; give Liberty AOL or give them...


08/15/08
McCain Fund-Raising Picks Up

The GOP presidential candidate raised $27 million in July.


08/15/08
Cash-Back Cards Aren't Money in the Bank

Some credit and debit cards give you some cash back on purchases. But you need to manage it well to benefit from it.


Your Recent Quotes: Quote Up0 | Quote Down0
Dow S&P 500 NASDAQ
Oil*
Gold
10 Yr
0.00%
%
%
%
Data delayed 20 min
Sign up for our FREE newsletters now. See All

  • Cramer's Daily Booyah!
  • Before the Bell

Premium Stock Ideas