Gold Prices Dip Before Economic Reports (Update1)

(Updated from 11:15 a.m. ET with settlement and closing prices.)

NEW YORK ( TheStreet) -- Gold prices dipped Monday as investors of the yellow metal weighed strength in the broader U.S. economy.

Gold for February delivery lost $2.60 to settle at $1,646.30 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,663 and as low as $1,642.60 an ounce, while the spot price was off $9, according to Kitco's gold index.

"There are no meaningful economic reports today; tomorrow you've got Alcoa ( AA) that kicks off earnings season, so that's potentially a little bit more meaningful in terms of investor sentiment," said Oliver Pursche, co-portfolio manager at GMG Defensive Beta Fund.

Pursche said traders may be looking ahead to Friday's report on import and export prices, which could give a better gauge on inflation.

The Federal Reserve announced last Thursday mixed sentiment among central bank members as to how much longer the central bank should continue its quantitative easing programs.

The news buried gold prices, which slipped 0.85% on Thursday and then plummeted 1.5% on Friday.

The decision to end monetary stimulus in 2013 -- which the Federal Open Market Committee's minutes said a few of its members believed should occur -- could be a result of the growing trend in positive economic reports, such as improving signs in the housing sector and manufacturing. Another reason could be the fear of inflationary pressures as a result of the massive stimulus the central bank has implemented since the 2008 financial crisis.

The labor market showed signs of more improvement on Friday as 155,000 jobs were added to nonfarm payrolls in December. The number was slightly better than the 150,000 a consensus of economists had expected. The unemployment rate -- which the Fed has marked as a target economic indicator for keeping rates near zero -- ticked up to 7.8% from November's originally reported 7.7% (the Bureau of Labor Statistics upwardly revised November's unemployment rate to 7.8%).

Silver prices for March delivery added 14 cents to close at $30.08 an ounce, while the U.S. dollar index sank 0.35% to $80.22.

Reports emerged during the weekend that Japan's government would implement an emergency economic stimulus package worth about $113 billion. News of the possible stimulus package didn't appear to create a significant move in the gold price.

Gold-mining stocks closed mostly lower on Monday. Shares of Agnico-Eagle Mines ( AEM) lost 2.8%, but shares of NovaGold Resources ( NG) climbed 0.83%.

Among volume leaders, Barrick Gold ( ABX) was off 1.5%, and Gold Fields ( GFI) slumped 1.4%.

Gold ETF SPDR Gold Trust ( GLD) shed 0.63%, while iShares Gold Trust ( IAU) slid 0.57%.

-- Written by Joe Deaux in New York.

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