Gold prices dip on US jobs data
Gold prices fell this afternoon after better than expected jobs data from the Labor Department reduced demand for safe haven assets, while the US dollar rose.
Today's employment report revealed that initial jobless claims in the US dropped 14,000 to 418,000 last week, a steeper decline than expected by analysts.
Even though the number of people filing for unemployment benefits remained above 400,000, the data was seen as a sign that the labour market in the US is in better shape than thought.
Equities in Europe and the US rallied on the update, which spurred demand for riskier assets.
Meanwhile, the US dollar, an alternative asset to gold, climbed after the upbeat jobs figures raised expectations for tomorrow's key US non-farm payrolls update.
Gold managed to hold decline at US$1,527/oz this afternoon as traders preferred to hold gold as a hedge against the risks posed by Europe's fiscal problems.
Fears about debt contagion in Europe intensified yesterday after Moody's downgraded Portugal's credit rating to junk status. The move drove gold prices above US$1,530/oz.
While gold fell, silver and platinum were on the rise, surging to US$36.38/oz and US$1,734/oz respectively.
Mining stocks were on the rise today. Fresnillo (LON:FRES) and Randgold Resources (LON:RRS) both added nearly 2 percent in afternoon trade. Lonmin (LON:LMI) tacked on 1.4 percent.
In the FTSE 250, Petropavlovsk (LON:POG) rallied 4 percent, while Hochschild Mining (LON:HOC) and Aquarius Platinum (LON:AQP) climbed 2.4 percent and 1.4 percent respectively.
Clontarf Energy (LON:CLON) led the small caps at mid afternoon, surging 17.5 percent. ECR Minerals (LON:ECR) and Vatukoula Gold Mines (LON:VGM) also did well, rising 9.5 percent and 7.5 percent respectively.
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