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--Comex December gold rises $47.80 at $1,876.90 an ounce
--U.S. jobs growth stalls in August; unemployment rate remains at 9.1%
--Gold ends at second highest settlement, short of Aug. 22 record of $1,891.90
(Adds price table.)
By Matt Day Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Gold futures climbed Friday to within striking distance of last week's record highs as a weaker-than-expected reading on the U.S. labor market spurred investors to buy the metal as a store of wealth.
The most actively traded gold contract, for December delivery, rose $47.80, or 2.6%, to settle at $1,876.90 a troy ounce on the Comex division of the New York Mercantile Exchange, the second highest ending price for the most-active contract behind the record of $1,891.90 reached Aug. 22.
The U.S. economy didn't add jobs for the first time in almost a year in August, according to a closely watched report from the Labor Department, the latest sign that growth in the world's largest economy is stumbling. Nonfarm payrolls were unchanged last month, as a decline in government sector employment cancelled out a modest gain in private-sector jobs. Economists had expected an increase of 80,000 jobs on the month.
Some investors turn to gold during turmoil in other markets on the belief that it holds its value well during times of crisis. The jobs report news weighed on equities markets and growth-sensitive commodities such as crude oil and copper.
"We would not be surprised to see gold revisit fresh all time highs in the next few weeks," said Ross Norman, chief executive of London bullion dealer Sharps Pixley.
Friday's employment report followed recent weak readings on U.S. manufacturing and worker productivity, bolstering speculation that the Federal Reserve may take steps to stimulate the flagging economy. Such monetary easing would likely boost gold, market participants say, as it would further tarnish the outlook for the U.S. dollar.
"The fact that we have to look at additional easing obviously doesn't say much about the state of the economy," said Matt Zeman, head of trading with Kingsview Financial.
The metal's status as a currency alternative also continues to receive a boost as perceived safe-haven currencies face the prospect of long-term devaluation from accommodative monetary policy, said Bob Haberkorn, a market strategist with MF Global. In the short term, investors are wary of further intervention by the Bank of Japan or the Swiss National Bank in an effort to stanch the rise of those countries' currencies.
The precious metal climbed to record intraday highs above $1,900 an ounce last week as worries about sovereign-debt woes and slumping growth in the U.S. and Europe sent investors seeking gold as a store of value.
Renewed investor comfort with risky assets and worries that the gold market was becoming overheated after its steep climb sparked a reversal in the metal's fortunes last week, sending futures as low as $1,705 before the declines drew bargain buyers.
Gold spent much of this week shuffling in sideways trading as market players took positions ahead of Friday's jobs report.
Settlements (ranges include open-outcry and electronic trading): London PM Gold Fix: $1,875.25; previous PM $1,821.00 Dec gold $1,876.90, up $47.80; Range $1,826.90-$1,884.60 Sep silver $43.069, up 47.7 cents; Range $41.535-$43.500 Oct platinum $1,884.80, up $31.90; Range $1,847.00-$1,886.40 Dec palladium $783.20, down 7.20; Range $776.20-$794.80
-By Matt Day, Dow Jones Newswires; 212-416-4986; matt.day@dowjones.com
(END) Dow Jones Newswires
September 02, 2011 15:12 ET (19:12 GMT)
Copyright (c) 2011 Dow Jones & Company, Inc.
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