Comex gold rallies past $1,400/oz as the dollar falters following disheartening unemployment data

Gold on the Comex division of the New York Mercantile Exchange crossed the psychologically important $1,400 an ounce threshold on Friday as an unexpected rise in the US unemployment rate bolstered gold's safe-haven appeal and dented the dollar significantly.

Gold futures for February delivery were recently trading up $19.60 at $1,408.90 an ounce, which was the day's high.

Meanwhile, the March silver contract on the Comex rose by 75.3 cents to $29.325, up about 9 percent for the week and 70 percent for the year.

Clearly, the headline news was that US non-farm payrolls increased by only 39,000 in November, much lower than the 143,000 gain expected.

The unemployment rate moved higher to 9.8 percent from 9.6 percent in the previous month. Most believed that the unemployment rate was going to hold steady.

"Gold are silver traders are closely watching the euro, which has broke above some key resistance levels. The euro has gained as the ECB has taken steps to stabilize the European bond markets, while the dollar fell due to the release of that key jobs report," a New York-based gold trader said.

The euro has risen by about 1 percent to 1.3378 against the dollar and has broken above a key resistance level at 1.3329.

George Gero, senior vice president of RBC Wealth Management, said that the disconcerting jobs report is an indication that recovery of the US economy is "not around the corner".

"(We) could have record prices in precious metals and the dollar weakness will highlight this," Gero said.

Gold's lifetime peak of $1,424.60 was hit on November 9.

In other bullish news, the SPDR Gold Trust, the world's largest gold-backed ETF, registered inflows of 4.6 tons Thursday, after 7 tons the day before, and now stands at 1,298.45 tons.

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