The gold price fell $8.35, or 0.5%, to $1,751.47 per ounce Friday morning as the January U.S. jobs report came in well above expectations. The price of gold turned lower after non-farm payrolls came in at 243,000 – handily beating the 140,000 consensus estimate among economists. The unemployment rate dropped to 8.3%, below the expected 8.5% level and the best reading since February 2009.
Gold and silver shares also continued to outperform the broader equity markets. The S&P 500 Index inched higher by 0.1% to 1,325.54 on Thursday, bringing its year-to-date gain to a very respectable – but much smaller – 5.3%. The markets’ ascent has coincided with a significant decline in investor risk aversion, evidenced by the CBOE Volatility Index (VIX) closing yesterday at 17.98 – its lowest level since July 22, 2011.
The gold price extended its gains yesterday after Federal Reserve Chairman Ben Bernanke discussed his economic outlook in testimony to the U.S. Congress. There, Bernanke largely reiterated the Fed’s dovish monetary policy stance – as outlined during last month’s FOMC meeting. The Fed Chairman also noted that the U.S. economic recovery has been “frustratingly slow” and remains quite vulnerable to the European sovereign debt crisis.