Gold reaches 3-week high as dollar extends losses

Gold futures on the COMEX Division of the New York Mercantile Exchange rose for the eighth straight day and touched a 3-week high on Friday, as the weak U.S. employment report heavily weighed on the dollar. Silver moved up, but platinum ended lower.

The most active gold contract for December delivery was up 6.0 dollars, or 0.5 percent, to finish at 1,205.3 U.S. dollars per ounce.

The U.S. Labor Department said on Friday that the non-farm payrolls shed 131,000 in July, which is much higher than economists' expectation of a 65,000 drop. And the private sector payroll, which is usually considered a better gauge of labor market recovery, added just 71,000 jobs, which is smaller than analysts' estimates. The unemployment rate remained steady at 9.5 percent.

The downbeat data worsened investors' concerns that the ongoing weakness in the labor markets would remain a major obstacle to the U.S. economic recovery, and sent the dollar to a three-month low against the euro. The weaker dollar continued to enhance gold's appeal as an alternative investment and encouraged investors to re- enter gold markets.

Gold price surged earlier in the session, benefiting from the decline of the dollar as well as investors' rekindled worries over the pace of U.S. economic recovery, and the price once hit 1,213.3 dollars per ounce, which is the highest level for a most-active contract since July 15. Gold has extended the longest rally since November in the last 8 sessions, and gained 1.8 percent this week.

September silver added 15.1 cents, or 0.8 percent, to settle at 18.472 dollars per ounce. October platinum dipped 1.7 dollars, or 0.1 percent, to settle at 1,570.8 dollars per ounce.

Source: Xinhua