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Both precious metals shined brightly as more quantitative easing chatter filled Wall Street after the latest unemployment report. Labor Department figures showed that payrolls increased less than projected in August, adding only 96,000 workers. The median estimate of 92 economists surveyed by Bloomberg expected an increase of 130,000. The July payroll gain of 163,000 was also revised lower to 143,000.
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The unemployment rate ticked slightly lower to 8.1 percent from 8.3 percent, but it was a product of the labor force participation rate falling to its lowest level since 1981. Overall, an estimated 368,000 people gave up looking for work. “This is definitely a setback for the labor market and the economy,” said Michael Feroli, chief U.S. economist at JPMorgan Chase, according to Bloomberg. “This clearly validates Bernanke’s concern. We have Europe, the fiscal cliff, and it is a generally cautious business environment.”
In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) increased 2.2 percent, while the iShares Silver Trust (NYSEARCA:SLV) climbed more than 3 percent higher. Gold miners (NYSEARCA:GDX) such as Barrick Gold (NYSE:ABX) and Yamana Gold (NYSE:AUY) jumped 3.6 percent and 2.11 percent, respectively. Meanwhile, Hecla Mining (NYSE:HL) and First Majestic (NYSE:AG) surged 5.8 percent and 3.4 percent, respectively.
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Disclosure: Long EXK, AG, HL, PHYS
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