Weak global economic data revived safe-haven demand for the precious metal
Bullion prices rebounded on Monday, 08 December 2014 at Comex as weak global economic data revived safe-haven demand for the precious metal. The gold market on Monday showed resilience in the face of bearish outside markets that saw the U.S. dollar index hit a four-year high overnight, while crude oil prices hit a five-year low during the U.S. trading session.
Gold for February delivery rose $4.50 to settle at $1,194.90 an ounce. On Friday, gold prices slumped in reaction to a better-than-expected jobs report. Still, the precious metal managed a 1.3% gain for the week.
March silver gained 2 cents to $16.27 an ounce.
The U.S. dollar hit a seven-year high against the Japanese yen and hit a two-year high against the Euro currency Mondayin the aftermath of Friday's much-stronger-than-expected U.S. jobs report. However, the dollar index did back down from its high on some profit taking as the session progressed on Monday.
In other overnight news, there was another downbeat economic report coming out of China. The world's second-largest economy saw its exports rise by 4.7% in November, which was well below expectations for a gain of 8.0%. Imports were down 6.7% versus expectations for a rise of 3.9%. This news is also a bearish underlying factor for the raw commodity sector, as China is the world's biggest importer of raw commodities.
And in Japan, gross domestic product in the third quarter was reported at minus 1.9%, which was below expectations. Japan is now in economic recession.
European Central Bank official Ewald Nowatny said Monday the weakening of the Euro zone economy has been massive. The OECD issued a report Monday saying the already-weak economic growth in the European Union will slow further in the coming months, including the potential for the EU to fall back into recession. The OECD forecast slowdowns in the economies of the U.K. and Russia, too. The agency said economic growth in the rest of the world's major economies will remain near present levels.
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