Gold prices rose Friday while silver soared on one of the most disappointing monthly jobs reports the U.S. has ever produced.
U.S. employment in August flatlined as business confidence plummeted under the weight of Washington's down-to-the-wire scrum over the debt ceiling, a major strike at Verizon and Europe's ongoing inability to fix either its Greek sovereign debt crisis or deteriorating banking sector.
Economists were expecting employers to add between 70,000 and 90,000 jobs, a number that would have left the nation's unemployment rate at 9.1 percent. But instead the world's biggest economy added zero nonfarm jobs. In July, at least, employers had added 85,000 jobs.
Net employment flatlined in August, Ellen Zentner, a senior U.S. economist at Nomura Securities International Inc. in New York, who forecast a decline of 5,000, told Bloomberg. When the outlook is uncertain, businesses don't hire. Calls that we're on the cusp of a recession or already there are not completely unwarranted.
The news stunned markets, extending losses on stock index futures and boosting precious metals. Gold is considered a safe investment in uncertain times, but many investors also are simply looking to gold for a quick profit as it prices continues to rise.
Silver for December delivery, the most actively traded contract on the CME Comex division of the New York Mercantile Exchange, jumped more than 3 percent to $43.14. Gold rose nearly 3 percent to $1,878.60 per ounce.
The value of the U.S. dollar, as measured by the ICE U.S. Dollar Index, was falling, as was oil.
Shares of gold-mining and silver-mining companies in premarket trading. Barrick Gold Corp., Goldcorp Inc., Newmont Mining Corp., Kinross Gold Corp., Yamana Gold Inc., Agnico-Eagle Mines Ltd. and Randgold Resources Ltd. all posted big gains before the opening bell.
Among silver miners, Silver Wheaton Corp. and Pan American Silver Corp. soared 2.4 percent, with Coeur d'Alene Mines Corp. and Silver Standard Resources Inc. up by nearly as much.