Gold moved higher in early U.S. trading on Friday, continuing a week of uncertainty. December gold moved to $810.20, up $3.10 on the session. Prices fell as low as $802.40 in the early going, but soon turned to the upside. The precious metal moved higher as the U.S. dollar saw weakness against some of the other major currencies, increasing gold's hedge value. The greenback fell away from a 2 1/2 week high against the euro and also dropped against the Canadian dollar, British pound, aussie and others. Gold also bounced back from a tough start on Thursday and finished up $3.40 an ounce. Prices dipped as low as $790.90 in electronic trading, but moved back higher as the U.S. dollar pared some of its earlier gains. The precious metal slipped by $4.10 on Wednesday, giving back some of its gains from Monday and Tuesday. Gold had gained nearly $20 an ounce earlier in the week, paring some of last week's losses. Prices finished down $42.50 last week as the greenback bounced back against major counterparts, most notably the Canadian loonie, which dropped below par against the buck for the first time in nearly two months. With the dollar struggling in recent months, gold has moved to a 27-year high. Friday morning, the Department of Labor released its report on the employment situation in the month of November, showing that employment increased by more than expected while the unemployment rate remained unchanged. The report showed that non-farm payroll employment increased by 94,000 jobs in November following a revised increase of 170,000 jobs in October. Economists had expected employment to increase by 70,000 compared to the increase of 166,000 originally reported for the previous month. Investors are looking ahead to the Federal Open Market Committee meeting, which is planned for Tuesday. Most experts expect to see an interest rate cut for the third straight meeting. The question for many has become whether the Fed will elect to slash rates by either 25 or 50 basis points. Meanwhile, crude oil traded above the $90 a barrel mark after a big rise on Thursday. Light sweet crude for January delivery posted a weekly-high close of $90.23 a barrel, up $2.74. Prices moved as low as $85.82 in electronic trading, but rallied for the first 90 minutes of the session and then added sharp gains again in the afternoon. Traders continued to consider OPEC's decision to leave production unchanged at its meeting in Abu Dhabi when many experts expected a rise of up to 1 million barrels a day. Prices had been dropping for about 10 days as investors predicted a production increase. Also on Wednesday, crude oil weekly inventory data from the Department of Energy showed a drop of nearly 8 million barrels. Analysts had been expecting a much more modest decrease of about 800,000 barrels.
December 7, 2007 8:55 AM