(Kitco News) - U.S. gold futures have risen sharply since the monthly U.S. jobs report showed the unemployment rate edged up in January when the market had been expecting a modest decline instead.
As of 9:31 a.m. EST, gold for April delivery was $19.10, or 1.2%, higher at $1,681.10 per ounce on the Comex division of the New York Mercantile Exchange. March silver was up 70.9 cents, or 2.3%, to $32.06 an ounce.
Economists looked for the jobless rate to edge down to 7.7% from 7.8% last month.
“The jobs rate rose to 7.9%. That shocked the market,” said Afshin Nabavi, head of trading with MKS (Switzerland) SA. “Also, the euro is continuing to go higher and higher.”
The Federal Open Market Committee has indicated it would keep U.S. interest rates at historically low levels for as long as the unemployment rate is above 6.5%. The rate had come down in recent months, leaving some participants wondering how long before policy-setters might start unwinding accommodation. But instead, the jobless rate climbed last month.
One New York trader cited short covering in precious metals. This is buying to offset positions in which traders previously sold.
Meanwhile, the euro was up to $1.3604 from $1.3577 late Thursday.
The next key chart level for gold will be the $1,685 area, Nabavi said. This is the high for the week hit in the April futures on Wednesday.
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By Allen Sykora of Kitco News; email@example.com