Gold and silver futures fell more than 1% Friday on signs the U.S. Federal Reserve could bring quantitative easing, one of the biggest boosts to gold’s breathtaking run, to an end this year.
Still, prices pared some losses after U.S. non-farm payrolls increased at a slightly lower pace than forecast last month.
Gold for February delivery fell $26.70, or 1.6%, to $1,647.90 U.S. an ounce on the Comex division of the New York Mercantile Exchange. It touched a low of $1,626 U.S.
That carried over from a $14.20 loss suffered in the prior floor-trading session, with that drop booked before the release of the Federal Reserve’s meeting minutes. At its lows Friday, gold had fallen more than $40, retracing below $1,630 an ounce.
Gold’s losses cooled a bit after the U.S. Labor Department said the U.S. added 155,000 jobs to non-farm payrolls for December, slightly short of the 160,000 forecast by economists.
Overall, however, gold’s decline was set off by Thursday’s release of the minutes from the Fed’s last meeting, which showed that several Fed officials thought the central bank would be able to slow or stop its bond purchases — a method of increasing monetary stimulus that goes beyond low interest rates — well before December 2013.
The Fed’s quantitative easing is generally recognized as a major source of liquidity that weakens the U.S. dollar and helps support prices of a range of assets, including gold.
The ICE dollar index, which measures the greenback against a basket of six other major currencies, climbed to 80.563 from 80.477 late Thursday, also moderating gains after the jobs report.
A stronger dollar tends to pressure prices for dollar-denominated assets.
Among other metals, March silver dropped 88 cents, or 2.9%, to $29.84 U.S. an ounce, after having fallen more than 4% to a low of $29.24 U.S. March copper shed two cents, or 0.6%, to $3.70 U.S. a pound.
April platinum gave up $19.80, or 1.3%, to $1,560.10 U.S. an ounce, while March palladium lost $6.75, or 1%, to $690.40 U.S. an ounce.
