Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold gained 0.8% to close above $2,340 after higher-than-expected jobless claims weakened the dollar, lifting alternative stores of value. Silver surged 2.8% to finish at $28.13 an ounce.

First-time filings for unemployment benefits jumped 22,000 to 231,000 last week, the highest level in nine months. Following last week's nonfarm payrolls report showing just 175,000 new jobs added in April, and other data indicating that job openings fell to a three-year low in March, the rising jobless claims suggest a softening of the labor market.

The dollar fell 0.2% against major rivals as traders speculated that the Fed may be more inclined to reduce interest rates if a weaker job market leads consumers to slow spending and thereby lower inflation. A weaker dollar boosts gold and other commodities by making them less expensive on other currencies, lifting overseas demand.

Benchmark 10-year Treasury yields were little changed, edging down a couple of basis points to 4.46.

Crude rose for a second session, adding 0.7% to nearly $80 per barrel on an unexpected drop in US reserves. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

Platinum and palladium rose 0.6% and 1.6%, respectively.

At the New York spot close: gold gained $18 to $2,340.30; silver surged 77 cents to $28.13; platinum picked up $6.20 to $990.80; and palladium climbed $15 to $971.30 an ounce.