Will the fundamentally weak dollar lend support for demand for precious metals?

”Gold Gains After U.S. Payrolls Data

Gold futures edged higher and silver pared steep losses as news of U.S. job creation renewed concerns about inflationary pressures.

Data that showed U.S. nonfarm payrolls rose by 244,000 last month, as the private sector posted its strongest employment gain in five years, restored some confidence about the recovery in the world’s largest economy.  That renewed a move into gold as some believe rising consumer and producer prices are in the offing amid easy monetary policy.

‘There is a little inflation play,’ said Sterling Smith, an analyst with Country Hedging.

The metals also gained as increased appetite for riskier assets sent the U.S. dollar lower.  Foreign buyers’ demand for precious metals increases whenever the greenback declines because dollar-denominated gold and silver appear cheaper.

The most actively traded gold contract, for June delivery, was up $13.10, or 0.9%, at $1,494.50 a troy ounce in midmorning trade on the Comex division of the New York Mercantile Exchange.  The nearby May contract was up $12.40, or 0.8%, at $1,493.30.

July silver was down 5.5 cents, or 0.2%, at $36.185 a troy ounce while May silver was off 10.6 cents, or 0.3%, at $36.125.  Although well up from intraday lows, the metal remains in a downtrend as rising trading-deposit requirements, known as margins, continued to force investors to sell out of the market.  July silver sank as far as $33.035, its lowest intraday price since Feb. 25.

Still, investors haven’t abandoned precious metals altogether.

At the same time it released the payrolls figures, the Labor Department also said the unemployment rate — which is obtained from a separate household survey — rose to 9.0% last month from 8.8% in March.”