Daily Gold Update

Source: CBS.Marketwatch

San Francisco— Gold futures closed at their lowest level in four months Friday to mark a one-week loss of nearly 3 percent with traders assessing the weaker-than-expected January employment report and prospects for strength in the dollar.

"Like a deer caught in headlights, gold bulls have been frozen by a mirage of bearish factors like IMF gold sales and an unjustifiable belief that the U.S. dollar is entering a long-term bullish uptrend," said Peter Grandich, editor of the Grandich Letter.

Gold for April delivery fell $2.60 to close at $415.90 an ounce on the New York Mercantile Exchange. It hasn't closed at a level this low since Sept. 27 and it's $12.20 below last Friday's close.

The Labor Department reported that the U.S. unemployment rate fell from 5.4 percent to 5.2 percent in January, the lowest since September 2001. Nonfarm payrolls, however, rose a disappointing 146,000 in the month.

The news prompted the dollar to lose ground, but the greenback cut its decline against the yen and turned firmer against the euro following dollar-supportive comments on the U.S. current account deficit from Federal Reserve Chairman Alan Greenspan.

"The job report was another disaster for the future of the U.S. dollar," said Ned Schmidt, editor of the Value View Gold Report.

"In Chairman Greenspan's dreams and speeches, he sees the current account deficit correcting, [but] how can it correct if the U.S. is losing manufacturing jobs and having to import more goods," he said.

"Delusions over the current account deficit and some magic fix to the U.S. deficit are supporting dollar," he said, so it's really another great buying opportunity for gold."

Elsewhere on the market Friday, other metals futures mirrored gold's move to end lower for the day and the week.

March silver closed down by 4.2 cents at $6.635 an ounce, down 2.4 percent for the week. The March copper contract ended at $1.3755 a pound, down 1.3 cents for the session and down 4.4 percent from the week-ago close.

March palladium fell to $182.05 an ounce, down $1.45 for the day, and down $10.10 for the week. April platinum shed 80 cents to close at $866 an ounce. That's down $6.30 for the week.

Inventories for copper, silver and gold were all unchanged as of late Thursday, according to Nymex. Supplies of copper stood at 45,817 short tons, silver at 102.4 million troy ounces, and gold at 5.98 million troy ounces.