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Gold Surges as December Jobs Report Flops

NEW YORK (TheStreet) -- Gold prices popped after the December jobs report revealed weaker-than-expected hiring at the end of 2013.

Gold for February delivery at the COMEX division of the New York Mercantile Exchange was jumping $10.30 to $1,239.70 an ounce. The gold price traded as high as $1,245 and as low as $1,226.60 an ounce, while the spot price was increasing $13.53, or 1.1%.

Despite the immediate surge from intraday lows around $1,227 an ounce, analysts remained skeptical of gold's upside potential.

"Short covering was featured in gold and silver futures markets," Jim Wyckoff, senior analyst at Kitco.com, wrote in a note on Friday. "The gold bulls have to be at least a bit disappointed their market could not rally more in the face of such a weak employment report. Such underscores the still-very-weak technical posture of gold and silver markets."

The Labor Department said Friday that the U.S. economy added 74,000 jobs, while the unemployment rate dropped to 6.7% from a prior reading of 7%. Economists surveyed by Thomson Reuters were expecting 196,000 jobs and for the rate to remain unchanged.

A weaker jobs report often fuels a rise in gold prices as investors purchase the commodity as a hedge against central bank economic stimulus. With the Federal Reserve's policy-making tied closely to the health of the U.S. labor market, Friday's report suggests the Fed may choose to slow its pullback in stimulus.

Silver prices for March delivery were climbing 36 cents to $20.05 an ounce, while the U.S. dollar index was sliding 0.12% to $80.84.

-- Written by Joe Deaux in New York.

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