Daily Gold Update

Source: MarketWatch

San Francisco— Gold futures climbed as much as $23 an ounce Friday, as a bigger-than-expected rise in the U.S. unemployment rate put severe pressure on the dollar, raising investment demand for the precious metal. Gold for August delivery rose to a four-session high of $899 an ounce on the New York Mercantile Exchange. It was last up $19, or 2.2%, at $894.50 an ounce. The contract had fallen Thursday to a low of $868, the weakest intraday level it's seen since May 2. It lost a total of $21.50 in the previous three trading sessions.

The "surprisingly bad jobs data has reversed recent short-term trends in markets," said Mark O'Byrne, a director at Gold and Silver Investments Ltd., in emailed comments. "Risk aversion was witnessed immediately after the report, with the dollar and international equity markets selling off and gold immediately rallying strongly." The U.S. unemployment rate jumped by half a percentage point in May — to 5.5%, the highest since October 2004 — on the biggest increase in seasonally adjusted unemployment in 33 years, data from the Labor Department showed Friday. "A serious recession has begun or is soon to be entered into the world's largest economy, and this will negatively impact the dollar and lead to higher gold prices," said O'Byrne. See full story.