On Friday, gold (NYSEARCA:GLD) futures for December delivery fell $40.30 to settle at $1,675.20 per ounce, while silver (NYSEARCA:SLV) dropped $1.39 to close at $30.86.
Both precious metals suffered their biggest single-day trading loss in months, as the Labor Department announced better-than-expected job creation in October. According to the report, the U.S. economy added 171,000 new jobs, easily beating estimates of 125,000. The improvement spurred discussions of the Federal Reserve cutting back its unlimited QE program, which sent the U.S. dollar to its highest level in two months.
“The strength of this data has fueled dollar gains as it threatens to cut short QE3’s lifespan,” said Kathleen Brooks, research director at Forex.com, according to MarketWatch. The U.S dollar index hit as high as 80.61 in afternoon trading.
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However, the unemployment rate ticked slightly higher to 7.9 percent, and still remains well above anything that would closely resemble a “recovery.” Furthermore, the year-over-year change in average hourly earnings increased only 1.1 percent, the lowest gain ever in the data series, according to Zero Hedge.
By the end of the day, the SPDR Gold Trust (NYSEARCA:GLD) closed 2.09 percent lower, while the iShares Silver Trust (NYSEARCA:SLV) fell 4.07 percent. Gold miners (NYSEARCA:GDX) such as Yamana Gold (NYSE:AUY) and Newmont Mining (NYSE:NEM) plunged 5.03 percent and 8.42 percent, respectively. Meanwhile, silver names such as Silver Wheaton (NYSE:SLW) and Endeavour Silver (NYSE:EXK) dropped more than 4 percent.
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Disclosure: Long EXK, AG, HL, PHYS