Gold and silver turn pale following job report

Gold ekes out small weekly gains

Precious metal prices ended lower on Friday, 03 February 2012 at Comex. Both gold and silver prices fell following better than expected economic data at Wall Street on Friday. The same coupled with strong dollar dulled the appeal of precious metals as an alternate investment as equities rallied on Friday. Nevertheless, gold prices registered weekly gains though silver ended little lower.

Gold for April delivery ended lower by $19 or 1.1%, to end at $1,740.3 an ounce on the Comex division of the New York Mercantile Exchange on Friday. It traded as low as $1,735.5 during intra day trading. For the week, gold gained 0.5%.



Gold ended the month of January higher by 11%. For the year 2011, gold rose 10%.

On Friday, silver prices for March delivery fell $0.43 or 1.3% to end at $33.75. For the week, silver shed 0.1%. For the month of January, silver gained 19%. For the year 2011, silver shed almost 11%.

In the currency market on Friday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies rose by almost 0.4%.

Precious metals declined following the release of economic reports expected for the day at Wall Street on Friday. A tepid tone to premarket trade turned decidedly positive in response to news that nonfarm payrolls jumped in January by 243,000 and that private payrolls climbed by 257,000. Market had expected, on average, respective increases of 155,000 and 168,000. Moreover, the headline unemployment rate fell to 8.3% from 8.5%, which is where it had been widely expected to remain.

Buying interest among equities was further bolstered by the latest ISM Service Index. It improved to 56.8 in January from 52.6 in the prior month. Market had expected a more modest improvement to 53.1.

After a heavy week of economic data this week, next week's offerings are lighter, which should have less impact on precious-metals trade. Consumer sentiment is slated for release on Friday, which will give some insight to how people are feeling about the U.S. economy. Next week may return investor's views toward Europe.