Gold fell 0.5 percent on Friday as an encouraging US jobs report boosted the dollar, but euro zone debt worries and political unrest in the Middle East lifted bullion off its lows. Positive nonfarm payrolls and manufacturing activity data confirmed the US economy was strengthening, but economists said the data was not enough to push the Federal Reserve off its ultra-easy monetary policy course, which has speeded economic recovery and helped power gold to record highs.
"As economic conditions appear to be improving, evidenced by today's data, gold suffers as a store of value in times of fiscal or financial uncertainties," said Mark Luschini, chief investment strategist of broker-dealer Janney Montgomery Scott with $53 billion assets under management.
Spot gold dropped 0.6 percent to $1,428.40 an ounce by 1:40 pm EDT (1740 GMT), sharply off its low at $1,412.55 hit earlier in the session. Bullion rose about 0.5 percent this week for its second consecutive weekly gain. It hit a record $1,447.40 an ounce last week. US gold futures for June delivery fell 0.7 percent to $1,429.90.
Gold recorded a 10th consecutive quarter of gains in the first three months of 2011, but the it was the smallest rise since the financial crisis gripped markets in late 2008.doesn't mean that one data point makes things all well and good," said Luschini. Investment products such as gold-backed exchange-traded funds saw less interest, with the No 1 New York's SPDR Gold Trust reported its biggest ever quarterly outflow in Q1.
Silver gained 0.3 percent to $37.72 an ounce. Platinum group metals rose but gains were limited after General Motors Co said US sales in March came in below expectations on Friday. Platinum inched up less than $1 to $1,766.99 an ounce, while palladium climbed 1.7 percent to $771.22.
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