Gold Prices Fall Sharply; Silver Prices also Tumble

By / / Gold


Gold prices fell sharply in trading on Friday even as the December nonfarm payrolls data fell short of expectations raising prospects of Federal Reserve continuing with its asset purchase program for a while. Silver prices also fell sharply on Friday.

Gold came under pressure after minutes from the Federal Reserve’s most recent monetary policy meeting showed that a number of Fed officials want the central bank to stop its asset purchase program before the end of 2013. Fed’s accommodative policy has been one of the drivers of gold prices in recent years.

The jobs data for December, however, has painted a mixed picture. While the U.S. economy added 155,000 jobs in December, the number fell short of forecasts and is not sufficient to bring down unemployment rate. The Fed has pledged that it will continue its asset purchase program until there is a sustained recovery in the labor market.

Speaking to Reuters, Howard Wen, Metals Analyst at HSBC, said that investors think that the payroll report is still not enough to change the Fed’s accommodative policy, which is a positive for gold.

Spot gold fell 1.3% to $1,641.70 an ounce on Friday. Earlier in the day, prices fell to $1,625.79 an ounce, a four-and-a-half month low, however, recovered slightly after the jobs report. Gold futures for delivery in February on the Comex division of the New York Mercantile Exchange fell $32.40 to settle at $1,642.20 an ounce.

Silver prices also tumbled on Friday. At last check, spot silver was down 1.7% to $29.61 an ounce.

The iShares Silver Trust (ETF) (NYSE: SLV) ended the day 0.38% higher at $29.26, the ProShares Ultra Silver (ETF) (NYSE: AGQ) ended the day 0.02% higher at $43.49, and the ProShares UltraShort Silver (ETF) (NYSE: ZSL) ended the day 1.58% lower at $49.69.

Platinum and palladium also fell on Friday. At last check, spot platinum was down 0.4% to $1,552.25 an ounce, while spot palladium was down 0.9% to $683.25 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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