Sector Snap: Gold Mining Companies

NEW YORK (AP) ⿿ A worsening global economic picture drove investors to snap up gold at a quickening pace Friday, which sent the shares of gold miners soaring.

Newmont Mining Corp. led all percentage gainers on the Standard & Poor's 500 index, rising 8 percent in midday trading. Newmont's shares hit a 52-week high just two weeks ago.

The value of gold, which had been sliding steadily all year, jumped by $37 an ounce to $1,601 after the U.S. and the European Union published job reports that were far worse than expected.

Gold has quickly become a safety valve for investors as the immediate economic landscape grows murky.

U.S. employers created only 69,000 jobs in May, the Labor Department reported Friday, the fewest in a year, and the unemployment rate ticked up to 8.2 percent from 8.1 percent in April, the first increase in 11 months.

It was worse in Europe, which reported Friday that unemployment in the 17 countries that use the euro was mired at 11 percent in April. In Spain, unemployment lurched to a staggering 24.3 percent; 51.5 percent for young people.

Investors are also jumping into gold contracts due to a scenario that looked much more feasible Friday than it did earlier in the week; that the U.S. government will step in again to prop up the economy, said Bob Gelfond, CEO of MQS Asset Management, a New York hedge fund.

Any government intervention would drive down the value of the dollar, which has been rising lately. Gold can serve as a hedge against inflation.

Newmont added $3.64 to $50.80 even as the S&P tumbled 2 percent.

Shares of Barrick Gold Corp. gained $2.35, or 6 percent, to $41.41, while Goldcorp Inc.'s stock climbed $2.83, or 7.8 percent, to $39.06. Shares of Kinross Gold Corp. rose 39 cents, or 4.9 percent, to $8.36.

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