Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold dipped 0.2% in choppy trade to finish the week down 1.7% after strong jobs and consumer sentiment data increased the odds that the Fed will taper monetary easing within the next few months. The U.S. non-farms payrolls report showed employers hiring 203,000 new workers last month, well above forecasts, which lowered unemployment to a five-year low of 7%. Consumer sentiment surged this month to its highest level since July, according to the Thomson Reuters/University of Michigan's preliminary reading, as optimism about the recovery strengthened.

After an initial plunge to $1,215 when the jobs data was released, gold quickly rallied back as high as $1,245 on bargain-hunting, indicating that an imminent taper, after months of speculation in the media, may have already been priced into the market. Charles Evans of the Chicago Fed said today that he wants to see several more jobs reports with similar gains before scaling back quantitative easing, suggesting a December taper is by no means a certainty.

In another indication that traders are already looking beyond the taper, U.S stock indexes broke a five-session losing streak, with the Dow adding nearly 200 points to close back above 16,000. QE has helped equities rise to record highs because it floods the market with easy liquidity and encourages investors to seek out higher returns through risk.

The other precious metals tracked gold lower. Silver slipped 0.2% for a weekly loss of 2.6%; platinum dropped 0.5% on the day and 0.9% on the week; and palladium dipped less than 0.1% today, finishing the week 2.3% lower.

At the Comex close: February gold dipped $2.90 to $1,229; March silver dropped 5 cents to $19.52; January platinum slipped $7.20 to $1,356.30 and March palladium lost 70 cents to $736.15 an ounce.