Gold and silver were down sharply Friday morning following a much-better-than-expected U.S. January employment report.

Spot gold was 1.13% lower at 10:40 a.m., bid at $1,738.50 per ounce with an ask price of $1,739.50. Spot gold traded as high as $1,763.30 and as low as $1,732.10. The London afternoon fixed reference price came in at $1,734, $17 per ounce higher than Thursday’s price fix, according to Kitco market data.

Spot silver was showing a loss of 2% per ounce, bid at $33.67 with an ask price of $33.77 The morning high as of time of writing was $34.49 and the low was $33.23. Friday’s reference price was set at $33.93 in the London a.m., 26 cents per ounce above Thursday’s fixed reference price.

January total nonfarm payroll employment rose by 243,000, nearly double an expected 125,000 gain. The headline unemployment rate fell 0.2% from December to 8.3%, better than a consensus expectation of 8.5%, the fifth consecutive monthly decline.

“Job growth was widespread in the private sector, with large employment gains in professional and business services, leisure and hospitality, and manufacturing. Government employment changed little over the month,” according to the Labor Department’s Bureau of Labor Statistics’ news release.

November’s total nonfarm payroll employment was revised from 100,000 to 157,000, while December’s was revised from 203,000 to 200,000.

Gold bullion prices were moving lower in London, below $1,750 per ounce, after having hit an 11-month high of $1,762 an ounce, according to BullionVault’s London Gold Market report. Nonetheless, gold is set to finish a fifth consecutive week of gains.

Federal Reserve Chairman Bernanke’s testimony before Congress lent support to gold earlier in the day, commented HSBC New York chief commodities analyst James Steele. Speaking at a meeting of the University of Texas’ $25.7 billion Investment Management Co. (UTIMCO) in Austin, Texas, on Thursday, hedge fund partner Kyle Bass stated, “As every day goes by, I see deflation in the things you own and inflation in the things you need.”

In stock exchange trading, gold and silver trusts were heading south.

• The SPDR Gold Trust (NYSE:GLD) was moving lower, down around 1%.
• The iShares Gold Trust (NYSE:IAU) was showing losses of around 1%.
• The iShares Silver Trust (NYSE:SLV) was moving lower, down more than 1.4%.

Gold and silver mining ETFs were down 1% or more.

• The Market Vectors Gold Miners ETF (NYSE:GDX) was down around 1.25%.
• The Market Vectors Junior Gold Miners ETF (NYSE:GDXJ) was showing losses of around 1%.
• The Global X Silver Miners ETF (NYSE:SIL) was down around 1.15%.

Gold mining shares were showing sharp losses.

• Agnico-Eagle Mines (NYSE:AEM) was showing losses of some 0.8%.
• Barrick Gold (NYSE:ABX) was down around 1.25%.
• Eldorado Gold (NYSE:EGO) was down around 3.3%.
• Goldcorp (NYSE:GG) was down nearly 1%.
• Kinross Gold (NYSE:KGC) was showing losses of some 1.75%.
• Newmont Mining (NYSE:NEM) was down nearly 1.1%.
• NovaGold Resources (AMEX:NG) was down nearly 2.85%, after suffering deep losses yesterday.
• Yamana Gold (NYSE:AUY) was down nearly 1.6%.

Silver mining shares were moving lower.

• Coeur d’Alene Mines (NYSE:CDE) was moving between slight gains and losses.
• Hecla Mining (NYSE:HL) was moving between slight gains and losses.
• Pan American Silver (NASDAQ:PAAS) was showing losses of around 0.5%
• Silver Wheaton (NYSE:SLW) was down around 1.3%.
• Silver Standard Resources (NASDAQ:SSRI) was showing losses of some 3.3%.

As of this writing, Andrew Burger did not hold a position in any of the aforementioned securities. Adrian Ash of BullionVault contributed to this report.