Gold mining companies rose Thursday in U.S. trading along with the price of the yellow metal on increased purchases of bullion, an unexpectedly downbeat unemployment report and very little evidence that the domestic economy has much energy.
Applications for unemployment benefits rose to 414,000 in the week ending Sept. 3 from an upwardly revised 412,000 the prior week, the Labor Department said on Thursday. Wall Street analysts had been looking for a dip to 405,000.
Bullion traders reported increased buying ahead of the Indian wedding season. Meanwhile, the U.S. economy can't seem to generate enough jobs to bring down the unemployment rate below 9 percent, a view that was reinforced by the head of the Federal Reserve who used a speech in Minneapolis to describe the current recovery as one of the weakest and most fragile in the nation's history.
That left investors in a risk-off frame of mind.
The situation, economically and politically, will not improve at all in the near future, MKS Finance head of trading Afshin Nabavi told Reuters. At this point in time, there is nothing else that can act as a safe haven ... Buy gold or just keep your cash under the mattress. Those are the only real (safe-haven) options.
The NYSE ARCA Gold Bugs Index rose 1.79 percent, Barrick Gold Corp. gained 1.28 percent, Yamana Gold Inc. climbed 4.32 percent and Iamgold Corp. increased 3.76 percent.
Silver mining companies also rose: Mag Silver Corp. was up 3.46 percent, Pan American Silver Corp. gained 1.37 percent, Hecla Mining Co. added 1.53 percent and Fortuna Silver Mines Inc. increased 4.22 percent.
Mike Obel works as Senior Editor, Copy Chief. Before that he was Markets Editor, assigning, editing and writing about business, markets, finance and economics. Before coming...