Bullion metals end higher

Precious metals ignore economic data

After dropping in the previous two sessions, bullion metal prices went up for third straight day on Friday, 06 February, 2009. Weak economic data pertaining to job losses increased the appeal of the precious metal as a safe haven against alternatives.

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. But silver prices dropped.

On Friday, Comex Gold for April delivery rose $0.30 (0.03%) to close at $913.9 an ounce on the New York Mercantile Exchange. For the week, gold prices ended down by 1.5%. For January, 2009, gold had gained 3.9%. Year to date, gold prices are higher by 3.4%.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly (12%) since then.

On Friday, Comex silver futures for March delivery rose 41 cents (3.2%) to end at $13.16 an ounce. Year to date, silver has climbed 16.2% this year. For 2008, silver had lost 24%.

Among major economic reports of the day, he Labor Department reported on Friday, 06 February, 2009 that the fury of the recession intensified in January, as the nation's unemployment rate jumped to 7.6% and nonfarm payrolls fell by the largest amount in 34 years. Nonfarm payrolls fell by a seasonally adjusted 598,000 in January, on the heels of a revised loss of 577,000 in December, 2008. Payrolls fell by 597,000 in November, 2008. January marked the largest payroll loss since December 1974.

Job losses were widespread across industries. The goods-producing industries lost 319,000 jobs, the most since 1975. Manufacturing payrolls fell by 207,000, the most since 1982. Manufacturing employment has fallen by 1.1 million since the recession began in December 2007. Of 83 manufacturing industries, just 8% were hiring in January, the lowest percentage on record dating back to 1991. Total hours worked in manufacturing fell 2.1% in January.

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