Daily Gold Update

Source: CBS.Marketwatch

Washington— Metals traders headed for the exits Friday, selling in reaction to growth in U.S. nonfarm payrolls that was much stronger than most economists had expected.

Copper alone bucked the weaker trend, while mining stocks moved lower to start before trimming their losses modestly.

Gold for June delivery, which came under jobs-related pressure from the start of New York Mercantile Exchange trading, closed down $3.80 to $426.90 an ounce. For the week, the benchmark contract lost 2.1%.

The nation's employment rolls swelled by 274,000 last month, eclipsing average estimates of 194,000 according to a MarketWatch survey.

"The data seemed to stun traders," said James Moore of TheBullionDesk.com.

The dollar rallied in response, undercutting futures prices for most of the metals sector.

In the case of gold, prices moved toward its 200-day moving average, noted Dale Doelling, chief market technician of Trends In Commodities.

"A close below this critical support level … could tip the balance in favor of the bears for some time to come," he said. "The mid-April lows are the only thing between here and the logical downside target of $400, and this level could be reached quickly if we see some serious long liquidation in the event the market does break key support."

Moore offered a similar assessment, saying risks of consolidation in the short run could push gold back to $415-to-$418 range.

Still, he remains sanguine on gold over the longer term, saying prospects for inflation and slowing growth provide an inviting backdrop for buying in the precious metal.

Friday's Nymex action also saw July silver falling to $6.965 an ounce, down 9.8 cents at the close.

But as with gold, July platinum came off its worst levels of the day, slipping $1.90 to close at $874.80 an ounce, while June palladium ended down $2.80 at $193.80 an ounce.

Meanwhile, copper managed to build on the prior session's grudging gain, adding 1.1 cents to $1.441 a pound.

According to the latest inventories data as tracked by Nymex, silver stood at 104.58 million troy ounces as of the close of business Thursday, up by 600,655 troy ounces from the previous day. Copper drifted down by another 349 short tons, leaving inventories at 28,493 short tons, while gold remained unchanged for a second straight day at more than 6.03 million troy.

In equities, the indexes tracking mining stocks rebounded from their weak open but remained lower.

The Philadelphia Gold/Silver Index stood at 85.39 points, of 0.6%, while the CBOE Gold Index sank 0.5% at 75.19 and the Amex Gold Bugs Index slipped 0.9% to 183.46.