The U.S. dollar gained approximately 0.5 percent against the shared currency of the European Union, which also benefited the yellowish metal as it and the monetary unit tend to perform the inverse of one another.
Gold dipped into a bear market as it drives toward notching its 12th consecutive year of annual gains. Through Thursday, gold's losses thus far this year were nearing 7 percent.
"All of the traditionally supportive reasons for buying gold don't seem to work right now," senior commodity broker Frank Cholly with RJO Futures in Chicago told Bloomberg on Friday. "The argument for gold as a safe haven or protection against inflation just isn't there. We have a risk-on market, with a lot of money pouring into equities. It doesn't look too good for gold."
At 12:44 p.m. on Friday, gold futures dropped 3.62 percent, a $55.50 dive to $1,504.93.
A contrarian perspective
Despite the losses, senior broker Kurt Pfafflin with Daniels Trading is of the belief that gold prices will bounce back.
He disagrees with the viewpoint stating U.S. economic growth is set to blossom this year, which would bolster increased real rates and eliminate the demand for the precious metal as a haven. In particular, he pointed to non-farming jobs data that was released late last week.
"Maybe it's just me but Friday's miserable NFP reading of only 88,000 jobs added versus the lowest estimate of 200,000 just doesn't seem to be the type of positive acceleration they're looking for?" he wrote on April 5. "Let me go on record to say that I stand in complete disagreement with their line of thinking."
The precious metal's losses on Friday were as much as 4 percent, according to Bloomberg.
The Wall Street Journal reports the bear market that gold has entered into, which is signified by losses of 20 percent from its recent peaks, is linked with gains to stocks, the belief that the U.S. Federal Reserve is set to close its monetary stimulus policies and control rising inflation.
Stock market figures during the past few weeks in the U.S. repeatedly have notched record highs, which is drawing the attention of investors.
"We are in an environment right now, where everyone wants to own stocks," chief investment officer Steve Shafer with Covenant Investors told The Wall Street Journal.
Friday's dive brought down the price of gold futures to its lowest since July 2011, according to Reuters. With a record price of $1,923.70 notched two months later, the precious metal on Friday slumped as low as $1,493.35 per troy ounce.
Gold presently is approximately 22 percent beneath the record price it notched in September 2011.
"The scale of the decline has been absolutely breathtaking. We tried to rally and that just didn't get anywhere," analyst Robin Bhar with Societe Generale told Reuters on Friday. "There hasn't been any downside support, it's like a knife through butter."
Cyprus, which was approved for emergency bailout aid last month while enduring the pressures of the sovereign debt crisis, is seeking additional funding to address its deep fiscal issues.
The nation is planning to sell its gold reserves as one method of raising some funds.
"The news on Cyprus' possible gold sale puts the focus back on the fact that many central banks in the developed world have been selling gold in the past few decades and they are still not so keen to hold gold as they used to be," analyst Christin Tuxen with Danske Bank told Reuters on Friday.
THIS MATERIAL IS CONVEYED AS A SOLICITATION FOR ENTERING INTO A DERIVATIVES TRANSACTION.
THIS MATERIAL HAS BEEN PREPARED BY A DANIELS TRADING BROKER WHO PROVIDES RESEARCH MARKET COMMENTARY AND TRADE RECOMMENDATIONS AS PART OF HIS OR HER SOLICITATION FOR ACCOUNTS AND SOLICITATION FOR TRADES; HOWEVER, DANIELS TRADING DOES NOT MAINTAIN A RESEARCH DEPARTMENT AS DEFINED IN CFTC RULE 1.71. DANIELS TRADING, ITS PRINCIPALS, BROKERS AND EMPLOYEES MAY TRADE IN DERIVATIVES FOR THEIR OWN ACCOUNTS OR FOR THE ACCOUNTS OF OTHERS. DUE TO VARIOUS FACTORS (SUCH AS RISK TOLERANCE, MARGIN REQUIREMENTS, TRADING OBJECTIVES, SHORT TERM VS. LONG TERM STRATEGIES, TECHNICAL VS. FUNDAMENTAL MARKET ANALYSIS, AND OTHER FACTORS) SUCH TRADING MAY RESULT IN THE INITIATION OR LIQUIDATION OF POSITIONS THAT ARE DIFFERENT FROM OR CONTRARY TO THE OPINIONS AND RECOMMENDATIONS CONTAINED THEREIN.
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE. THE RISK OF LOSS IN TRADING FUTURES CONTRACTS OR COMMODITY OPTIONS CAN BE SUBSTANTIAL, AND THEREFORE INVESTORS SHOULD UNDERSTAND THE RISKS INVOLVED IN TAKING LEVERAGED POSITIONS AND MUST ASSUME RESPONSIBILITY FOR THE RISKS ASSOCIATED WITH SUCH INVESTMENTS AND FOR THEIR RESULTS.
TRADE RECOMMENDATIONS AND PROFIT/LOSS CALCULATIONS MAY NOT INCLUDE COMMISSIONS AND FEES. PLEASE CONSULT YOUR BROKER FOR DETAILS BASED ON YOUR TRADING ARRANGEMENT AND COMMISSION SETUP.
YOU SHOULD CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES AND FINANCIAL RESOURCES. YOU SHOULD READ THE "RISK DISCLOSURE" WEBPAGE ACCESSED AT WWW.DANIELSTRADING.COM AT THE BOTTOM OF THE HOMEPAGE. DANIELS TRADING IS NOT AFFILIATED WITH NOR DOES IT ENDORSE ANY TRADING SYSTEM, NEWSLETTER OR OTHER SIMILAR SERVICE. DANIELS TRADING DOES NOT GUARANTEE OR VERIFY ANY PERFORMANCE CLAIMS MADE BY SUCH SYSTEMS OR SERVICE.
GLOBAL ASSET ADVISORS, LLC (“GAA”) (DBA: DANIELS TRADING, TOP THIRD AG MARKETING AND FUTURES ONLINE) IS AN INTRODUCING BROKER TO GAIN CAPITAL GROUP, LLC (GCG) A FUTURES COMMISSION MERCHANT AND RETAIL FOREIGN EXCHANGE DEALER. GAA AND GCG ARE WHOLLY OWNED SUBSIDIARIES OF STONEX GROUP INC. (NASDAQ:SNEX) THE ULTIMATE PARENT COMPANY.