Stalled U.S. job growth combined with a renewed focus on Greece’s finances and Europe’s debt crisis helped lift demand for safe-haven assets such as gold exchange traded funds on Tuesday as bullion prices rose to a new record high.
SPDR Gold Shares (NYSEArca: GLD) was up 0.5%.
Gold prices rose on Friday after the U.S. Labor Department released data that showed nonfarm payrolls were unchanged in August, whereas economists had expected at least 75,000 new job creations, reports Harpreet Bhal for Reuters. [Gold ETFs Jump After Disappointing Jobs Report]
Spot gold prices were trading just shy of $1,900 an ounce on Tuesday morning after a run above $1,920.
“The initial reaction on the gold price was that it traded a bit higher after the weaker-than-expected non-farm payrolls data,” commented George Boele, head of forex and commodities research at ABN Amro. “But it didn’t get the kind of boost that we have seen in recent weeks because market players are still a bit cautious after the volatility seen recently in gold prices.”
Additionally, the new Greek aid package has been put on hold after it was revealed that Greece’s deficit cut program has fallen behind its target.
“We’re seeing a new round of flight into so-called safe haven assets. The debt problems in the Eurozone are still a worry and it offers an opportunity for market speculators to buy gold,” stated Peter Fertig, a consultant at Quantitative Commodity Research.