Gold fell Friday as it looks to be headed toward its third straight weekly loss on speculation that interest rates will rise with an economic recovery. Likewise, silver also fell to its seven-week low.
The appeal of the precious metal so far in the new year is dull after a strong performance in 2010 when it outperformed both stocks and bonds, gaining 30% in 2010.
Tom Pawlicki, a MF Global analyst, said, "Higher interest rates take away the bullish argument that low opportunity costs are supportive for gold."
Gold futures for February delivery fell $3.80, or 0.3%, to $1,342.70 an ounce Friday morning on the Comex in New York. It is down 1.3% for the week, after losing 4.3% in the prior two weeks. Earlier today, its price fell to $1,337, its lowest level since November 18.
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