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Gold Rallies as Payrolls Boost Prospect for Easing

April 6, 2012 at 23:42 by Vladimir Vyun

Gold rose today as worse-than-expected nonfarm payrolls spurred the speculation that the US Federal Reserve is going to stimulate the economy further. US employers added 120,000 jobs, while as much as 207,000 was expected. The previous reading was revised upwardly and the unemployment rate unexpectedly fell, but the data was still considered disappointed by most market participants.

Potential quantitative easing may increase demand for gold as an inflation-hedge. The Fed signaled this week that it’s not in a hurry to ease the monetary policy, reducing probability of additional stimulus. On the other hand, Fed Chairman Ben Bernanke has long been saying that the state of the employment market in the United States isn’t as good as considered by most people and the economy still needs support. The disappointing payrolls support such view and boost incentive for further easing.

Bullion for immediate delivery rose 0.3 percent to $1,636.43 per ounce today.

If you have any questions and comments on the commodities today, use the form below to reply.

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