Gold extended gains today as demand for safe haven assets remained high after yesterday’s report from the Labor Department revealed an increase of 2,000 in initial jobless claims in the US, which currently stand at five month highs at 484,000. Analysts polled by Reuters expected a decline to 465,000.
The update followed last week’s non-farm payrolls data showing 131,000 jobs lost in July, while June’s decrease in payrolls was upped from 125,000 to 221,000.
The yellow metal reached record highs in US dollar terms at US$1,265/oz in June with the safe haven demand being driven by concerns over Europe’s debt crisis and the slowing economic recovery in the US. The worries over the US economy were reinforced by the data released over the past two weeks along with the Fed’s decision to leave the current ultralow interest levels unchanged and buy more US debt.
Investment bank Goldman Sachs (NYSE:GS) said yesterday that gold prices could reach US$1,300/oz within the next six months.
Gold reached US$1,214/oz, while silver and platinum climbed to US$18.07/oz and US$1,525/oz respectively.
Major mining stocks were in decline today.
Gold miners Randgold Resources (LON:RRS) and African Barrick Gold (LON:ABG) declined 1%, while peer form the FTSE 250 Petropavlovsk (LON:POG) lost 1.2%.
Silver miner Fresnillo (LON:FRES) and platinum miner Lonmin (LON:LMI) shed 1.3% and 1% respectively.
Specialty chemicals firm Johnson Matthey (LON:JMAT) moved down 1%.
Silver producer Hochschild Mining (LON:HOC) declined marginally, while fellow midcap Aquarius Platinum (LON:AQP) went against the tide, posting a small gain.
Africa operating gold miner GMA Resources (LON:GMA), junior diamond miner Stellar Diamonds (LON:STEL) and Russia focused Ovoca Gold (LON:OVG) followed the majors, slipping 9%, 6% and 5.5% respectively.
UK-registered China operating copper and gold miner Central China Goldfields (LON:GGG) outperformed the sector, advancing 6%. Turkey focused gold miner Ariana Resources (LON:AAU) and Turkey and Ethiopia operating gold miner Stratex International (LON:STI) also did well, gaining 5%.