Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold surged 1.5%, closing above $1,218, as the dollar fell further in the wake of Friday's poor jobs report, spurring demand for alternative stores of value.

The Labor Department reported on Friday that non-farm payrolls added just 126,000 jobs in March, far fewer than forecast, while gains for the previous two months were revised lower by nearly 70,000. Following a series of disappointing economic reports in recent weeks, the poor jobs data reduced the likelihood that the Fed will be able to raise interest rates by this summer without damaging the recovery.

The dollar fell after the weak jobs data and extended its losses after the ISM reported today that the U.S. services sector slowed further in March. A weaker dollar supports higher prices from gold and other commodities denominated in it for international trade by making them less expensive overseas.

In addition, William Dudley of the New York Fed, a prominent member of the FOMC, warned that the strong dollar has sent a "significant shock" through the U.S. economy, undermining a recovery that was already "disappointing compared to historical patterns." Projecting growth of just 1% in the first quarter, Dudley is no hurry to raise rates until the economy is stronger.

The other precious metals outpaced gold higher. Silver jumped 2.5% while platinum and palladium rallied 2.2% and 3%, respectively.

At the Comex close: June gold surged $17.70 to $1,218.60; May silver jumped 41 cents to $17.11; July platinum rallied $25.90 to $1,180.40; and June palladium rose $22.50 to $768.80 an ounce.