Moderate loss for bullions

Strong job report at Wall Street impact prices

Bullion prices closed with a modest loss on Friday, 06 December 2013 as traders reacted to a stronger-than-expected U.S. jobs report for November. The upbeat jobs report raised expectations that the Federal Reserve may soon scale back its bond-buying program and that put pressure on gold, though prices finished well off the lows of the day.

Gold for February delivery settled at $1,229 an ounce on the Comex division of the New York Mercantile Exchange, down $2.90, or 0.2%. It had fallen to as low as about $1,214 right after the jobs data, rebounded to trade at highs around $1,242, then pulled back again. Prices lost 1.7% for the week.

March silver closed at $19.52 an ounce, down almost 5 cents, or 0.2%. Prices saw a 2.6% weekly loss.

As per latest data, at Wall Street, the U.S. Department of Labor said 203,000 jobs were created in November, above the average guess of 185,000. The unemployment rate fell 0.3 basis points to 7% as furloughed government workers returned to their jobs.

Non farm payrolls were revised up for September (to 175,000 from 163,000) and down slightly for October (to 200,000 from 204,000). Nonfarm private payrolls increased by 196,000 (consensus 200,000). The report also detailed that average hourly earnings increased by 0.2% (consensus 0.2%) while aggregate earnings increased 0.6% (a good portent for consumer spending). The average workweek edged up 0.1 to 34.5 hours (consensus 34.5) and factory overtime increased 0.1 to 3.5 hours.

The Fed has been buying $85 billion a month in Treasurys and mortgage-related assets since September 2012 in an effort to boost economic growth. The stimulus program, also known as quantitative easing or QE, has contributed to weakness in the U.S. dollar which has, in turn, provided support for dollar-denominated gold in recent months.

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