Investing.com - Gold and silver futures fell sharply on Friday, after stronger-than-forecast U.S. jobs data boosted expectations that the Federal Reserve will start to taper off its bond-buying program by the end of this year.
Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its bond-buying program sooner-than-expected.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery tumbled 2.4% on Friday to settle the week at USD1,221.95 a troy ounce.
Earlier in the session, Comex gold prices fell to a daily low of USD1,207.25 a troy ounce, the weakest level since June 28.
Gold futures were likely to find support at USD1,180.35 a troy ounce, the low from June 28 and a 34-month low and resistance at USD1,249.75, Friday’s session high.
On the week, gold prices lost 1%, the third consecutive weekly decline.
Gold prices are on track to post a loss of 27% on the year, the worst yearly decline since 1981, amid speculation the Fed will start to unwind its stimulus program by the year's end.
An exit from the stimulus would deal a heavy blow to gold, which has thrived on demand from investors who buy gold to hedge against the inflationary risks of loose monetary policies.
The Department of Labor said Friday the U.S. economy added 195,000 jobs in June, more than the 165,000 increase forecast by economists. May's figure was revised upwards to 195,000 jobs from 175,000, while April's figure was revised up to 199,000 from 149,000.
The headline unemployment rate remained unchanged at 7.6% last month
Fed Chairman Ben Bernanke said last month the bank could begin tapering its USD85 billion-a-month asset purchase program by the end of 2013 and wind it down completely by the middle of 2014 if the economy picks up as the central bank expects.
The dollar rallied to multi-week highs against the euro and the British pound following the upbeat jobs report, dampening the appeal of the precious metal.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, advanced 0.9% on Friday to settle the week at 84.70, the strongest level since July 6, 2010.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
In the week ahead, investors will be looking ahead to Wednesday's minutes of the Federal Reserve's June meeting, for further hints regarding the direction of U.S. monetary policy.
Elsewhere on the Comex, silver for September delivery plunged 4.3% on Friday to settle the week at USD18.86 a troy ounce. Silver future prices lost 3.9% on the week, the third consecutive weekly drop.
Meanwhile, copper for September delivery tumbled 3.3% on Friday to close the week at USD3.069 a pound. Despite Friday’s downbeat performance, Comex copper prices added 0.35% on the week.
Copper traders will be looking ahead to key trade data out of China later in the week, as well as monthly inflation figures.
Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its bond-buying program sooner-than-expected.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery tumbled 2.4% on Friday to settle the week at USD1,221.95 a troy ounce.
Earlier in the session, Comex gold prices fell to a daily low of USD1,207.25 a troy ounce, the weakest level since June 28.
Gold futures were likely to find support at USD1,180.35 a troy ounce, the low from June 28 and a 34-month low and resistance at USD1,249.75, Friday’s session high.
On the week, gold prices lost 1%, the third consecutive weekly decline.
Gold prices are on track to post a loss of 27% on the year, the worst yearly decline since 1981, amid speculation the Fed will start to unwind its stimulus program by the year's end.
An exit from the stimulus would deal a heavy blow to gold, which has thrived on demand from investors who buy gold to hedge against the inflationary risks of loose monetary policies.
The Department of Labor said Friday the U.S. economy added 195,000 jobs in June, more than the 165,000 increase forecast by economists. May's figure was revised upwards to 195,000 jobs from 175,000, while April's figure was revised up to 199,000 from 149,000.
The headline unemployment rate remained unchanged at 7.6% last month
Fed Chairman Ben Bernanke said last month the bank could begin tapering its USD85 billion-a-month asset purchase program by the end of 2013 and wind it down completely by the middle of 2014 if the economy picks up as the central bank expects.
The dollar rallied to multi-week highs against the euro and the British pound following the upbeat jobs report, dampening the appeal of the precious metal.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, advanced 0.9% on Friday to settle the week at 84.70, the strongest level since July 6, 2010.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
In the week ahead, investors will be looking ahead to Wednesday's minutes of the Federal Reserve's June meeting, for further hints regarding the direction of U.S. monetary policy.
Elsewhere on the Comex, silver for September delivery plunged 4.3% on Friday to settle the week at USD18.86 a troy ounce. Silver future prices lost 3.9% on the week, the third consecutive weekly drop.
Meanwhile, copper for September delivery tumbled 3.3% on Friday to close the week at USD3.069 a pound. Despite Friday’s downbeat performance, Comex copper prices added 0.35% on the week.
Copper traders will be looking ahead to key trade data out of China later in the week, as well as monthly inflation figures.