Gold price slid back below $1,670 per ounce Friday morning after U.S. weekly jobless claims came in modestly ahead of expectations

The gold price slid back below $1,670 per ounce Friday morning after U.S. weekly jobless claims came in modestly ahead of expectations. Silver retreated alongside the gold price, by $0.53, or 1.6%, to $32.08 per ounce. In the currency markets, the U.S. Dollar Index advanced 0.2% to 77.20, while the euro fell 0.4% to 1.3731 against the greenback.

The gold price held near $1,680 per ounce on Wednesday after the Fed minutes revealed rising concerns over the health of the U.S. economy. “Stresses in global financial markets, sluggish growth in households’ real incomes, and heightened uncertainty about economic prospects seemed to have contributed to lower consumer and business sentiment and to be weighing on economic growth. Recent indicators pointed to continuing weakness in overall labor market conditions, and the unemployment rate remained elevated,” according to the transcript of the most recent Federal Open Market Committee (FOMC) meeting.

The Fed also spent a considerable amount of time discussing European sovereign debt issues. Although the central bank noted that the impact of euro zone concerns on U.S. financial institutions had thus far been muted, the Fed issued a warning for their counterparts across the Atlantic. “Participants agreed that, if European policymakers did not respond effectively, European sovereign debt and banking problems could intensify, with potentially serious spillovers to the U.S. economy.”

As for U.S. monetary policy, the minutes disclosed that the majority of the FOMC felt that Operation Twist “could contribute importantly to better outcomes in terms of the Committee’s dual mandate of maximum employment and price stability.” While most FOMC members supported the “maturity extension program,” the minutes revealed that two Fed Governors favored “stronger policy action.” Although the Fed did not identify the two, their existence could raise the possibility of a third round of quantitative easing – which would likely be quite favorable for the price of gold.