Gold Advances as Jobless Claims Rise More Than Forecast

11:16 PM @ Thursday - 13 November, 2014
Gold futures rose for the second time in three days after a report showed U.S. jobless claims increased more than forecast last week, boosting demand for the metal as an alternative investment.

The World Gold Council said today that it’s “quite optimistic” on the outlook for jewelry demand after total consumption in the third quarter fell to the lowest in almost five years. Futures dropped 8.4 percent in the three months ended Sept. 30. The price has climbed 2.7 percent from a four-year low of $1,130.40 an ounce on Nov. 7.

“Today’s jobless numbers were disappointing and gave a boost to gold,” George Gero, a New York-based precious-metals strategist who helps manage $500 million at RBC Capital Markets LLC, said in a telephone interview. “At these prices, we will see more physical buyers come in.”

Gold futures for December delivery rose 0.2 percent to $1,161.10 at 10:28 a.m. on the Comex in New York. Aggregate trading was 40 percent above the average for the past 100 days for this time, according to data compiled by Bloomberg.

Through yesterday, the price dropped 3.6 percent this year. Last week, the dollar rose to a five-year high against a basket of 10 currencies on expectations that the Federal Reserve will increase benchmark interest rates next year, while central banks in Europe and Japan expanded measures to support economic growth.

Gold surged 70 percent from December 2008 to June 2011 as global central banks increased money supplies on an unprecedented scale, spurring inflation concerns.

The metal tumbled 28 percent in 2013, the biggest drop in three decades, after some investors lost faith in gold as a store of value as U.S. inflation remained muted.

Annual Loss

This week, holdings in global exchange-traded products backed by gold fell to the lowest in five years. In the week ended Nov. 4, the net-long position in Comex futures and options declined 36 percent, the most since mid-November, government data showed on Nov. 7.

The London-based World Gold Council said today that imports by India, the world’s second-biggest user, more than doubled in the third quarter as a decline in prices spurred jewelry demand during festivals. China is the top consumer.

Silver futures for December delivery gained 0.1 percent to $15.635 an ounce. On Nov. 7, the price touched $15.04, the lowest since February 2010. Through yesterday, the metal declined 19 percent this year after plunging 36 percent in 2013.
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