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Gold, Silver Down as U.S. Dollar Firms

Gold prices dropped on Monday after last week’s stronger-than-expected U.S.
jobs data indicated the Federal Reserve may not engage in further quantitative easing.

Gold for December delivery dropped $9.10 to $1,771.70 per troy ounce on the
Comex division of the New York Mercantile Exchange.

Gold futures finished trading on Friday slightly lower, with a drop of $15.70 per
troy ounce. The precious metal dropped 0.4 percent for the week.

The jobless rate in the U.S. dropped below the 8 percent level for the first time
since January of 2009, following the creation of 114,000 jobs in September, according to
Labor Department figures released Friday.

Gold had gained in the weeks since the Federal Reserve announced a third
installment of quantitative easing. The policy was partly a response to persistent
weakness in the U.S. labor market.

Edward George, London-based soft-commodities specialist at Africa-focused
Ecobank, said gold futures have come off their peak as speculators cash in to take profit.

He added this reflects the fact that gold is close to its previous peak in March this
year and not far off its all-time peak in July 2011.

According to MarketWatch, other metals analysts were warning of a technical
development that is commonly known as a topping pattern, which is the end of a rising
price pattern, with recent gains in the market approaching overhead resistance.

Clive Maund, a former commodity broker who operates a subscription-based
investment advice service, noted a large short position by commercial traders who are
viewed as being among the savvier precious-metals investors as well as the inability
of gold or silver to break decisively higher last are considered factors that could lend
themselves to a correction.

Silver for December delivery dropped 64 cents, or 1.8 percent, to $33.95 per troy
ounce.

Dollar strength also brought commodities under pressure as growth worries
continued. The World Bank dropped its 2012 growth forecast for China to 7.7 percent
and said the European debt crisis poses a major threat to Asia.

Markets also anticipated the meeting of Euro zone finance ministers later Monday
on concerns over Greece’s next bailout payment.

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