A rally in the greenback sent precious metals prices lower Thursday, with favorable labor market news only adding to the dollar's strength.
June-dated gold contracts were off $11.10 at $676.30 an ounce, while July silver contracts were dipping 35 cents at $13.55 an ounce, in recent action on the Comex division of the New York Mercantile Exchange.
The exchange-traded funds that hold bars of the metals,
streetTracks Gold Shares
iShares Silver Trust
, were sliding 1.5% and 3%, respectively.
The Labor Department reported new claims for unemployment insurance fell more than expected last week, but the numbers for the prior week were adjusted up marginally.
The figure on initial claims adds weight to the view that recent increases in claims were related more to technical factors than to a deterioration in labor demand," writes Randy Diamond, an analyst at Miller Tabak in New York.
The fair economic news boosted the U.S. currency, which was bouncing back after flirting near an all-time low against the euro Wednesday. The action in the foreign exchange market provided substantially all the impetus for the movement in metals prices.
One euro was recently selling for $1.3599, down from $1.3637 in the prior session. The dollar was changing hands for 119.36 yen, up from 118.72 yen previously. Over time, the prices of precious metals tend to move inversely with the value of the U.S. dollar.
Jon Nadler, an analyst at Montreal bullion dealer Kitco, also laments a lack of buying by individual investors in the gold market. They "matter most" for the health of the market, he says.
The falling price of precious metals was only a part of the problem for gold producer
. The Denver-based miner reported much worse-than-expected first-quarter earnings of 15 cents a share, down from 46 cents in the same period a year ago and below the consensus forecast of 24 cents.
Newmont's earnings report showed rising costs per ounce of gold sold, which jumped to $421 an ounce from $275, and a 10% drop in sales volume more than offset increased sales prices over the 12-month period. Traders lost no time in marking the shares down 4%.
As for base metals, prices for copper contracts were sliding 11 cents at $3.49 a pound on the Comex.