Gold Prices Rise on Flat Jobless Claims

Gold prices are trading slightly higher Thursday after disappointing jobless claims. The initial jobless figures remaining unchanged at 374,000 is bad news for the economy and good news for precious metals. This jobless reports show prolonged weakness in labor markets.

By Joe Deaux
08/30/12 - 09:50 AM EDT
The Street

NEW YORK (TheStreet) -- Gold prices were trading slightly higher Thursday after unchanged weekly initial jobless claims failed to suggest a strengthening economy ahead of the economic summit in Jackson Hole, Wyo.

Gold for December delivery was gaining $2.10 to $1,665.10 at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,666.70 and as low as $1,656.70 an ounce, while the spot price was up $6.40, according to Kitco's gold index.

"Today's initial jobless figures of 374,000 is again bad news for the economy good news for gold in that immediate reaction of no changes in interest rates even if [Ben] Bernanke gives no hard news tomorrow keeps investors from selling," George Gero, precious metals strategist at RBC Wealth Management, wrote in a note on Thursday.

Silver prices for September delivery were down about 3 cents to $30.81 an ounce, while the U.S. dollar index was down 0.12% to $81.44.

Weekly initial jobless claims remained unchanged at 374,000 on Thursday morning, and maintained a prolonged weakness in labor markets. The Federal Reserve has repeatedly stated it would consider additional monetary action on the strength of the economy, including the forward-looking sentiment in the labor market.

Investors though, are waiting for central bankers to meet Friday for a summit in Jackson Hole. Though many analysts don't expect to see any Fed easing at this meeting, there is still a hope as it was at this meeting two years ago when Bernanke announced QE2.

Gold gains took a reprieve Wednesday after second-quarter GDP was revised up to 1.7% from 1.5%.

"The upward revision was to 1.7% ... And the markets took this as positive news, and decided that they didn't need Gold anymore," Chuck Butler, president of world markets at EverBank, wrote in a note on Thursday.

Gold mining stocks were slightly higher Thursday. Goldcorp(GG_) was gaining 0.68%, while Eldorado Gold(EGO_) was rising 0.86%.

Among other mining stocks, Barrick Gold(ABX_) was up 0.24%, while Yamana Gold(AUY_) was gaining 0.24%. Kinross Gold(KGC_) was gaining 0.35%.

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