Gold and Silver Close to Fresh Highs, Prices Dive After-Hours

by on November 9, 2010 · 0 comments

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Continuing a streak of four-day highs Tuesday, U.S. gold prices reached a new record above $1,424 an ounce and silver hit a fresh 30-year peak atop $29 an ounce.

However, precious metals gave up substantial ground in after-hour trading as profit-taking emerged when the U.S. dollar continued its upward momentum and the Chicago Mercantile Exchange (CME) announced an increase in silver margins.

"The raise in the silver margins from $5,000 to $6,500 combined with the beginning of a big roll-over from the December to the March contract makes some people think about taking profits and waiting until the coast cleared," said George Gero, Vice-President, Global Futures, RBC Capital Markets. "The margins were only raised for silver — but under the (Standard Portfolio Analysis of Risk) or SPAN margining system that the CME uses, the possibility of other margin increases propped up."

In New York precious metals, gold prices for December delivery added $6.90, or 0.5 percent, to end at $1,410.10 an ounce on the Comex in New York. It ranged from $1,403.00 to $1,424.30. Futures were trading down at $1,392.10 an ounce as of 6:34 PM ET.

December silver prices jumped $1.474, or 5.4 percent, to settle at $28.906 an ounce. However, the metal was at $27.00 an ounce in late trading.

"The sell-off started because the market had gone too far too fast," Frank McGhee, head precious metals trader with Integrated Brokerage Services LLC in Chicago, was quoted on Reuters. "The margin change added insult to injury," he added, but said it was not the major factor causing the after-hours sell-off.

In PGM metals, platinum prices for January delivery advanced $38.50, or 2.2 percent, to close at $1,809.60 an ounce. The metal was moving toward $1,764 an ounce in after-hours trading. Palladium prices for December delivery were at $690.45 an ounce. It settled earlier at $742.65 an ounce for a gain of $31.75, or 4.5 percent.

In PM London gold prices, the benchmark gold Fix was $1,421.00 an ounce for an increase of $32.50. Silver was fixed to $28.550 an ounce for a pick up of $1.83.

In London PGM metals, the platinum Fix was $1,786.00 an ounce, marking a gain of $34.00, and palladium was $730.00 an ounce, adding $36.00.

In gold and silver coin news, U.S. Mint Silver Eagles registered one of their best days in months. Silver Eagle coin sales rallied 435,000, picking this week’s numbers up by 660,000 and taking November to 915,000. A similar increase on Wednesday would bring the coins within a notch of 30 million for the year. Bullion one ounce Gold Eagles doubled their previous day’s tally, rising 8,000. The fractional sizes remained unchanged. The following are the latest United States Mint figures:

U.S. Mint 2010 Gold & Silver Bullion Coin Sales
November 2010 Totals
American Eagle Gold Coin (1 oz) 11,500 996,500
American Eagle Gold Coin (1/2 oz) 1,000 40,000
American Eagle Gold Coin (1/4 oz) 2,000 58,000
American Eagle Gold Coin (1/10 oz) 0 380,000
American Buffalo Gold Coin (1 oz) Sold Out 209,000
American Eagle Silver (1 oz) 915,000 29,545,500


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