Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold gained 0.7% to close above $1,260, its 200-day moving average, on fallout from Friday's disappointing jobs report from the Labor Department and a surge in oil prices.

Nonfarm payrolls added just 156,000 new jobs in September, posting its third consecutive month of weak job growth, while the unemployment rate ticked up to 5%. In conjunction with weaker forecasts for third-quarter GDP growth, the subpar jobs data raises new questions about momentum in the economy and whether the Fed will raise interest rates this year. On Friday, the Atlanta Fed cut its Q3 growth outlook to just 2.1%, down from 3.9% six weeks ago.

Oil pushed above $50, gaining more than 2% to reach a 14-month high, after Russia said it plans to work with OPEC to curtail the global supply glut that has pressured crude for 18 months. Gold often trades in sympathy with oil as a hedge against energy-inflation.

Gold's games came despite rising equities, with the Dow adding 0.6%, and continuing strength in the dollar, which added 0.4%. Rising risk appetite tends to pull investment monies from safe havens, while a stronger dollar makes gold more expensive to overseas buyers because it is priced in the U.S. currency.

The other precious metals also rose, with silver jumping 1.6% while platinum and palladium picked up 0.2% and 0.3%, respectively.

At the Comex close: December gold gained $8.50 to $1,260.40; December silver jumped 28 cents to $17.66; January platinum added $2.80, to $965.40; and December palladium edged up $1.15 to $668.55 an ounce.