Bullion metals end almost unchanged

Weak employment report increases the appeal of precious metals

Bullion metals ended almost unchanged on Friday, 09 January, 2009 as the dollar strengthened and also due to the weak economic data. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Friday, Comex Gold for February delivery rose $0.50 (0.1%) to close at $855 an ounce on the New York Mercantile Exchange. For the week, gold prices ended down by 2.8%. This year gold has lost 3.8% till date. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly (15%) since then.

On Friday, Comex silver futures for March delivery rose by 23 cents to $11.32 an ounce. For the week, silver has gained 13 cents. For 2008, silver lost 24%.

At the currency market on Thursday, the dollar was up against most major counterparts. The dollar index gained 1.4%.

Among the major economic reports for the day, on Friday, 2009, the Labor Department reported the U.S. economy lost 524,000 jobs in December, closing out the worst year of job losses since World War II. The unemployment rate rose to 7.2%, the highest in 16 years. Nearly 2.6 million jobs were lost in 2008, with 1.9 million destroyed in just the past four months.

The 1.5 million jobs lost in the fourth quarter were the most in any three-month period since 1945.As a percentage of employment, job losses in 2008 totaled 1.8%, the worst since 1982 and the third-largest since the war.

The report also detailed that in 2008, the unemployment rate rose by 2.3 percentage points and unemployment increased by 3.6 million. Another 3.4 million workers were forced into part-time work during the year.

In the crude market on Friday, crude prices fell by almost a dollar and closed at $48.8/barrel.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.