Investing.com - Gold futures declined for the first time in four sessions on Friday, retreating from an 11-week high after stronger-than-expected U.S. jobs data eased concerns over the U.S. economy and dampened expectations that the Federal Reserve will introduce fresh stimulus measures to boost growth.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery settled at USD1,728.75 a troy ounce by close of trade on Friday, shedding 0.68% over the week, the first weekly decline in five weeks.
Gold futures were likely to find short-term support at USD1,719.15 a troy ounce, the low of January 30 and resistance at USD1,765.85, Friday’s high and the highest since December 2.
Gold prices lost 1.75% on Friday after the U.S. Department of Labor said nonfarm payrolls rose by 243,000 last month, the fastest increase in nine months, after a revised 203,000 gain in December.
Economists had expected the U.S. economy to add 150,000 jobs in January. The unemployment rate unexpectedly declined to a three-year low of 8.3% from 8.5%.
Other U.S. data on Friday also supported the view of economic expansion. U.S. factory orders rose for a second month in December, while the U.S. service sector grew at the fastest rate since February 2011 last month.
The encouraging data dampened expectations the Fed will implement fresh monetary easing measures to stimulate U.S. economic growth, prompting some investors to sell their gold holdings and lock in gains from a Fed-fuelled rally that took prices to the highest level since early December.
Gold prices surged nearly 5.5% in the eight trading sessions following the Fed’s pledge to push back the timing of a possible interest rate increase until late 2014 and indicated that the bank may embark on a third round of quantitative easing.
In testimony to the House Budget Committee in Washington on Thursday Fed Chairman Ben Bernanke said the economy has shown “signs of improvement” but warned that the outlook remained “uncertain”.
Despite Friday’s drop, industry participants continue to be bullish on the precious metal. Newcrest Mining, the world's third largest gold producer, expects gold to trade as high as USD2,500 an ounce and retain its safe haven status for as long as the world's financial system remains in crisis mode.
Bank of America said in a report Wednesday that it expected gold prices to climb to USD2,000 an ounce by the fourth quarter of 2012, as the fundamentals for strong gold prices have not changed.
Meanwhile, euro-denominated gold futures settled at EUR1,311.25 by close of trade on Friday, slumping 0.34% on the week. Prices stand less than 5% away from September’s all-time high of EUR1,374.70.
Concerns over delays in negotiations on a debt restructuring deal for Greece persisted, despite assurances from European officials that a deal is close to being finalized.
Greece needs to secure an agreement with its private creditors on a debt swap deal in order to receive its next tranche of bailout funds in order to avoid a default when a EUR14.5 billion bond repayment comes due on March 20.
Elsewhere on the Comex, silver for March delivery settled at USD33.64 a troy ounce by close of trade on Friday, easing down 0.76% on the week, while copper for March delivery settled at USD3.905 a pound, adding 0.43% over the week.
Silver was the best performing of the major precious metals in January, rising nearly 16%. American Eagle Silver coin sales totaled 6.1 million ounces in January, their second strongest month since the U.S. Mint introduced them in 1986.
In the coming week, investors will be watching developments in the euro zone, with European leaders holding a string of meetings to discuss Greece’s bailout and the financial guarantees for the European Financial Stability Facility, the euro zone’s new bailout fund.
Meanwhile, the European Central Bank is to hold its policy setting meeting, but the bank is widely expected to keep rates on hold at 1%. In the U.S., Fed Chairman Ben Bernanke is to testify before the Senate budget committee in Washington.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery settled at USD1,728.75 a troy ounce by close of trade on Friday, shedding 0.68% over the week, the first weekly decline in five weeks.
Gold futures were likely to find short-term support at USD1,719.15 a troy ounce, the low of January 30 and resistance at USD1,765.85, Friday’s high and the highest since December 2.
Gold prices lost 1.75% on Friday after the U.S. Department of Labor said nonfarm payrolls rose by 243,000 last month, the fastest increase in nine months, after a revised 203,000 gain in December.
Economists had expected the U.S. economy to add 150,000 jobs in January. The unemployment rate unexpectedly declined to a three-year low of 8.3% from 8.5%.
Other U.S. data on Friday also supported the view of economic expansion. U.S. factory orders rose for a second month in December, while the U.S. service sector grew at the fastest rate since February 2011 last month.
The encouraging data dampened expectations the Fed will implement fresh monetary easing measures to stimulate U.S. economic growth, prompting some investors to sell their gold holdings and lock in gains from a Fed-fuelled rally that took prices to the highest level since early December.
Gold prices surged nearly 5.5% in the eight trading sessions following the Fed’s pledge to push back the timing of a possible interest rate increase until late 2014 and indicated that the bank may embark on a third round of quantitative easing.
In testimony to the House Budget Committee in Washington on Thursday Fed Chairman Ben Bernanke said the economy has shown “signs of improvement” but warned that the outlook remained “uncertain”.
Despite Friday’s drop, industry participants continue to be bullish on the precious metal. Newcrest Mining, the world's third largest gold producer, expects gold to trade as high as USD2,500 an ounce and retain its safe haven status for as long as the world's financial system remains in crisis mode.
Bank of America said in a report Wednesday that it expected gold prices to climb to USD2,000 an ounce by the fourth quarter of 2012, as the fundamentals for strong gold prices have not changed.
Meanwhile, euro-denominated gold futures settled at EUR1,311.25 by close of trade on Friday, slumping 0.34% on the week. Prices stand less than 5% away from September’s all-time high of EUR1,374.70.
Concerns over delays in negotiations on a debt restructuring deal for Greece persisted, despite assurances from European officials that a deal is close to being finalized.
Greece needs to secure an agreement with its private creditors on a debt swap deal in order to receive its next tranche of bailout funds in order to avoid a default when a EUR14.5 billion bond repayment comes due on March 20.
Elsewhere on the Comex, silver for March delivery settled at USD33.64 a troy ounce by close of trade on Friday, easing down 0.76% on the week, while copper for March delivery settled at USD3.905 a pound, adding 0.43% over the week.
Silver was the best performing of the major precious metals in January, rising nearly 16%. American Eagle Silver coin sales totaled 6.1 million ounces in January, their second strongest month since the U.S. Mint introduced them in 1986.
In the coming week, investors will be watching developments in the euro zone, with European leaders holding a string of meetings to discuss Greece’s bailout and the financial guarantees for the European Financial Stability Facility, the euro zone’s new bailout fund.
Meanwhile, the European Central Bank is to hold its policy setting meeting, but the bank is widely expected to keep rates on hold at 1%. In the U.S., Fed Chairman Ben Bernanke is to testify before the Senate budget committee in Washington.