Gold prices rallied in the afternoon as more signs of a slowdown in global economic recovery spurred demand for safe haven assets.
Traders were choosing gold over the US dollar for wealth protection, driving it to a near record high. The greenback, which is seen as an alternative asset to gold, fell on today’s non-farm payrolls data. The Labor Department said that the economy added just 54,000 jobs last month, much less than the general consensus estimate of about 150,000. It is also much lower than the 232,000 gain recorded in April. The unemployment rate rose to 9.1 percent.
The data delivered yet another blow to recovery hopes after this week’s ADP employment report showed that the private sector added just 38,000 jobs last week. Meanwhile, the Chicago PMI index fell to the lowest level since November 2009.
Gold last traded at US$1,540/oz. Silver fell to US$35.86/oz and platinum held steady at US$1,812/oz.
Mining stocks were headed in different directions. Fresnillo (LON:FRES) lost 1.7 percent, while Lonmin (LON:LMI) added 1 percent.
In the FTSE 250, Hochschild Mining (LON:HOC) tacked on 1 percent and Petropavlovsk (LON:POG) shed 1 percent.
Mining exploration company operating in Australia GGG Resources (LON:GGG) did very well today, tacking on more than 9 percent. Gold and copper focused explorer Solomon Gold (LON:SOLG) added 8.5 percent.