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Gold futures fell Friday to log a one-week loss of more than 4 percent with metals traders` assessment of the U.S. Labor Department`s December payrolls leaning toward the likelihood of near-term gains for the dollar.

``The gold/dollar correlation continues,`` said Amaury Conti, equity trader at Austin Calvert-Flavin, an investment adviser in San Antonio, Texas.

U.S. December payrolls logged a smaller-than-expected gain of 157,000, but including upward revisions of 34,000 to previous months, December payroll growth was close to expectations of 178,000. The mixed news lifted the greenback higher against the euro.

Against this backdrop, gold for February delivery closed at $419.50 an ounce on the New York Mercantile Exchange. For the week, the contract dropped $18.90, or 4.3 percent. It closed Friday at its lowest levels since mid-October.

Buy Opportunity

In all, the U.S. economy added 2.2 million workers in 2004, but of those, fully 76,000 jobs were actually involved in manufacturing, said Ned Schmidt, editor of the Value View Gold Report.

``The remaining 2.1-plus million are shuffling papers, playing on the Internet or involved in the housing bubble,`` he said, pointing out that this ``type of meaningless job creation does not support a world-class currency.``

So the ``beginning-of-year relief rally for [the] dollar is nearing completion,`` he concluded.

Given that, ``gold and silver investors should be aggressive buyers next week at these prices,`` he said.

Peter Grandich, editor of The Grandich Letter, also provided an upbeat outlook for gold prices. ``Since bottoming in 2001, gold has moved up in stages that have been interrupted by short, but sharp, corrections,`` he said. ``These corrections wipe out much of the excessive optimism seen at each peak.``

So the latest correction ``from the December giddy highs appears to have once again set the stage for the resumption to higher levels`` in gold prices, he said. Prices traded at 16-year highs near $460 in early December.

Overall, ``the factors that have sustained this bull run in gold have not changed,`` Grandich said. ``That bodes well for those of us who believe $500 gold is not a question of if, but when.``

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