Gold and Silver Miners Receive Support After Unemployment Report

On Friday, gold (NYSEARCA:GLD) futures for February delivery, the most active contract, fell $25.70 to settle at $1,648.90 per ounce, while silver (NYSEARCA:SLV) futures for March dropped 77 cents to close at $29.95.

Both precious metals declined, but finished the day above their lows as the recent unemployment report builds a case for more monetary easing from the Federal Reserve. Nonfarm payrolls increased by 155,000 workers last month, according to the Labor Department. The figure was mostly in line with expectations, as the median estimate of 82 economists surveyed by Bloomberg called for a gain of 152,000. Meanwhile, economists surveyed by Dow Jones Newswires expected an increase of 160,000.

Over the course of 2012, the economy added an average of 153,000 jobs per month. However, this is roughly the amount needed just to maintain the current high unemployment rate. In December, the headline unemployment rate was 7.8 percent, unchanged from the prior month since November was revised higher from 7.7 percent to 7.8 percent. The U6 unemployment rate, which includes job seekers and those stuck in part-time jobs, is still above 14 percent.

By the end of the day, the SPDR Gold Trust (NYSEARCA:GLD) finished about 0.50 percent lower, while the iShares Silver Trust (NYSEARCA:SLV) edged 0.20 percent higher. Gold miners (NYSEARCA:GDX) such as Barrick Gold (NYSE:ABX) and Yamana Gold (NYSE:AUY) also ticked slightly higher. Meanwhile, Endeavour Silver (NYSE:EXK) and First Majestic Silver (NYSE:AG) increased 0.76 percent and 1.49 percent, respectively.

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Disclosure: Long EXK, AG, HL, PHYS