Gold Prices Fall Sharply; Silver Prices also Tumble
Gold prices fell sharply in trading on Friday, dropping below $1,690 an ounce level for the first time in almost two months as better than expected nonfarm payrolls data for the month of October raised questions over how long the Federal Reserve will continue with its latest bond buying program. Silver prices also tumbled in trading on Friday.
Gold had surged after the Federal Reserve announced a third round of quantitative easing back in September. The Fed had said back in September that it will buy $40 billion in mortgage backed securities every month until there is a significant recovery in the labor market. Since then data from the labor market and other economic indicators have pointed to a recovery.
Earlier today, the Labor Department reported that the U.S. economy added 171,000 jobs in October, beating consensus forecast of a gain of 125,000 jobs. On Thursday, a report from ADP showed that the private sector added 158,000 jobs in October. The strong data from the labor market has raised doubts over the longevity of the Fed’s bond buying program and hence the sharp drop in gold prices.
On Friday, spot gold fell nearly 2% to $1,680 an ounce. Gold futures for delivery in December on the Comex division of the New York Mercantile Exchange slipped $40 to settle at $1,675.20 an ounce.
Silver also tumbled on Friday. At last check, silver futures were down nearly 4%.
In late trading on Friday, the iShares Silver Trust (ETF) (NYSE: SLV) was down 4.10%, the ProShares Ultra Silver (ETF) (NYSE: AGQ) was down 8.16%, and the ProShares UltraShort Silver (ETF) (NYSE: ZSL) was up 7.84%.
Platinum and palladium also fell sharply on Friday. At last check, spot platinum was down 1% to $1,542 an ounce, while spot palladium was down 2% to $599 an ounce.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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