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Gold Bulls Look in Future with Confidence, Despite Friday’s Drop

November 5, 2011 at 0:38 by Vladimir Vyun

Gold fell on Friday, but ended this week with weekly gain. The negative developments in Europe, as well as in other parts of the world, supported demand for the precious metal and made gold bulls to look in the future with confidence.

The US nonfarm payrolls showed that the employment growth slowed from 158,000 jobs in September to 80,000 jobs in October. The Eurozone services PMI (in the final revision) contracted to 46.4 in October, compared to the preliminary estimate of 47.2. The report said that the conditions in France, Italy and Spain deteriorated, leading to the fasted decline of the industry since mid-2009. The German factory orders fell 4.3 percent in September.

The pessimism rules markets and gold remains in high demand as a safe haven not only among speculators, but among central banks as well. The International Monetary Fund reported that Bolivia, Kazakhstan, Tajikistan and Thailand added a total 26.7 tons of gold valued at $1.52 billion to their reserves in September. Central banks bought 220 tons of the metal during this year, according to the World Gold Council.

Spot price for gold fell from $1,765.90 to close at $1,755.30 per ounce on COMEX. The price rose from $1,743.50 per ounce this week.

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