Gold Rises for First Day in Three as Dollar Declines, Silver Advances

by on July 1, 2009 · 0 comments

Gold cruised forward Wednesday for its biggest gain of the week, and halted a two-day slide. A weakened U.S. dollar was a cited catalyst for the yellow metal’s climb. Silver and platinum advanced as well. In other markets, oil prices fell following data showing higher crude inventories. U.S. stocks rose modestly.

Bullion update ...In New York trading futures for bullion:

  • Silver for July delivery gained 16.6 cents, or 1.2 percent, to 13.74 an ounce.

  • Gold for August delivery jumped $13.90, or 1.5 percent, to $941.30 an ounce.

  • October platinum rose $19.80, or 1.7 percent, to $1,205.10 an ounce.


"The gain [in gold] was largely seen as an oil-led bounce from the sell-off that took place on Tuesday, and the recapture of the $940-plus area is deemed as essential before significant progress can be made to higher ground," wrote Jon Nadler, senior analyst at Kitco Metals, Inc. "The market got a shot in the arm after the dollar lost sizeable ground on the heels of this morning’s ADP report."


The ADP report showed that U.S. companies cut 473,000 jobs in June, which was more than expected.

In London bullion, the benchmark gold price was set earlier in the day to $938.25 an ounce, $3.75 higher than the fixing on Monday. Silver was set 29 cents lower to $13.65 an ounce. Platinum was fixed $2.00 higher to $1,188.00.

In related bullion coin news, the US Mint on Wednesday reported that June sales of gold and silver eagles surged. For the first six months of this year, 13,824,500 silver eagles and 670,500 gold eagles have been sold.

Gold, considered a hedge during times of high inflation and economic uncertainty, tends to follow oil and move opposite to the U.S. dollar. A rising greenback makes dollar-denominated commodities, like bullion, more expensive for holders of other world currencies.

Oil and gasoline prices

Oil fell Wednesday following an Energy Information Administration report indicating gasoline inventories rose by 2.3 million barrels last week, which was more than forecasted.

New York crude-oil for August delivery dropped 58 cents, or 0.8 percent, to close at $69.31 a barrel. Earlier in the day it had climbed as high as $71.85.

Prices at the pump again moved lower, as they have for the last week. The national average for unleaded gasoline is at $2.63 a gallon, according to AAA. The price is three-tenths of a cent down from Tuesday, 4.6 cents lower than a week ago but still 11.80 cents higher than last month.


"When you see consumer confidence sliding again and no improvement on the job front, barring any major geopolitical or catastrophic event like a hurricane, it looks like prices have topped," Geoff Sundstrom, a spokesman for AAA, was quoted on Bloomberg.


U.S. Stocks

U.S. stocks marked modest gains Wednesday "with investors starting off the third quarter on a positive note, after reports on manufacturing and housing added to bets that the pace of the recession is slowing," writes Alexandra Twin of CNNMoney.

The Dow Jones industrial average rose 57.06 points, or 0.68 percent, to 8,504.06. The S&P 500 Index climbed 4.01 points, or 0.44 percent, to 923.33. The Nasdaq Composite Index gained 10.68 points, or 0.58 percent, to 1,845.72.

Check out additional market resources at Live Bullion Spots, the Silver Calculator, U.S. Mint Collector Bullion Price Guide, and the Inflation Calculator.

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