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USD, Gold and Oil

July 10, 2011

The dollar was generally weaker on Friday, giving back recent gains against the yen and sterling after a dismal U.S. jobs report raised talk of a double-dip recession.

In another sign that the U.S. economic recovery may be losing steam, the June jobs report released by the Labor Department showed weak jobs growth for the second month in a row.

According to the report released Friday, the U.S. economy added an anemic 18,000 jobs in June, well below the 105,000 predicted by most economists and well below the average of 215,000 posted from February through April.

The dollar was steady near $1.4250 versus the euro, clinging to this week’s gains. However, the buck dropped sharply to Y80.60 versus the yen, down from a monthly high of Y81.46.

The dollar also eased versus the sterling, slipping to $1.6025 from $1.5931.

Gold prices closed up $11.50 Friday ending at $1,545.20 and silver closed up 27 cents ending at $36.81. In the mean time, gold bars and gold coins need inside the Middle East jumped 39 % in the fourth quarter from the year earlier, according to World Gold Council figures. Jointly with gold, silver prices are at the whim of investment choice demand, safe-haven buying, inflation fears, momentum buying and selling and cost manipulation.

Crude oil prices fell heavily on Friday after the jobs report showed U.S. employers added only 18,000 jobs in June well below expectations of 105,000 added jobs, which spread pessimism among traders and increased risk aversion in markets, as investors sold higher yielding assets including crude oil and bought safe assets and lower yielding currencies including the USD, which pressured crude oil prices to drop heavily and nearly erase all of last week’s gains.

Oil lost 2.22% on Friday, quoting 96.48.


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