NEW YORK (
TheStreet ) --
Gold prices soared and
silver prices continued to fall Friday as the U.S. jobs number surprised to the upside
Gold for June delivery added $10.20 to settle at $1,491.60 at the Comex division of the New York Mercantile Exchange and has fallen 4.7% in a week. The gold price Friday has traded as high as $1,498.50 and as low as $1,471.10. The spot gold price was rising $11.30, according to Kitco's gold index.
Traders on the Comex were still evening out their positions into Friday's U.S. jobs report, but some bargain hunting did emerge and physical buyers came out of the woodwork buying up the metal at "discount" prices despite a stronger U.S. dollar.
Silver prices were still shaking out leveraged traders, down 95 cents, off session lows, to settle at $35.28 an ounce cratering 27% in one week. Silver has broken below multiple resistance levels from $38 to $36 and now is seeing if it can hold the $32 level. The
iShares Silver Trust(
SLV_) dropped another 118.34 tons Thursday bringing this week's grand total to 752.42 tons.
Gold prices are holding up better than silver, a rare divergence. "Gold up, silver down is a very rare event -- less than 14% of all trading days since 1968," says Adrian Ash, head of research at BullionVault.com. "Before this week it has happened only "two consecutive days ... 125 times and three consecutive days happening only once."
Ash also says that "gold fell harder than this in all of the last 10 springs except 2002, 2005 and 2007. Each of those drops then saw gold recover and breach its previous high by the next New Year, averaging a rise of 9.7%."
The combination of overbought conditions, four margin hikes from the CME and other global clearing houses, and a recent parabolic move have zapped the "poor man's gold" harder than gold. The U.S. dollar index also staged a mini-rally this week, which sped up as European Central Bank President Jean-Claude Trichet appeared more dovish after the latest ECB meeting which dragged down the euro and propped up the dollar.
The U.S. dollar index was adding 0.8% to $74.71 Friday after rumors spread that Greece was considering leaving the EU and on the good jobs number. Investors speculated that the
Federal Reserve might be more apt to raise rates or shrink its balance sheet if the employment picture keeps improving.
Nonfarm jobs rose 244,000 in April and the private sector added 268,000 reportedly the biggest month increase since 2006. The unemployment rate rose to 9%, most likely because more people, feeling better about the economy, entered the market. March private sector job growth was revised upwards as well.
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