Silver Scores 7.7% Weekly Gain, Gold Rises 2.1%

by on February 18, 2011 · 0 comments

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Silver’s two-day string of soaring gains put the metal up 7.7 percent on the week and at a fresh 31-year high. While weekly gains in gold were more modest at 2.1 percent, the yellow metal is on a five day winning streak and it closed Friday at its best level since January 3.

Inflation concerns and geopolitical tensions in the Middle East were among the bullish factors cited for gains in precious metals.

April gold prices climbed $3.50, or 0.3 percent, to close at $1,388.60 an ounce on the Comex in New York.

"There are still flare-ups and people getting hurt [in the Middle East]," Adam Klopfenstein, a senior market strategist at Lind-Waldock in Chicago, said and was cited on Bloomberg. "There’s more talk of inflation, and no one wants to be short of precious metals heading into the weekend."

Gold reached an intraday low of $1,382.00 an ounce and a high of $1,392.60 an ounce. Despite its gains this week, gold prices are still down 2.3 percent on the year.

"The metals markets are sprinting toward new highs and breaking through key resistance not seen for a very long time, especially in silver," Kevin Kerr, editor of Kerr Commodities Watch, was quoted on MarketWatch. "Widespread unrest in the Middle East and elsewhere, as well as growing inflation concerns globally, are pushing more and more investors into the precious metals as a hedge."

Silver prices for March delivery soared 72.6 cents, or 2.3 percent, to $32.296 an ounce. It ranged from $31.610 to $32.870. The metal surged 94.1 cents on Thursday. Silver has advanced for four straight weeks and it is at a level not seen since 1980 when the Hunt Brothers attempted to corner the silver market.

"While a core 10% gold holding is very much advisable for most investors with assets worth protecting, perhaps, silver (the single riskiest asset in this group) should be approached with the discipline once manifested by one, Mr. Buffett," noted Jon Nadler, Senior Analyst at Kitco Metals Inc.

"Investors who did not exercise such ‘discipline’ and piled into $52.00 per ounce silver, hot on the heels of the Hunt Bros., in early 1980, are still waiting for $138.00 (inflation-adjusted) silver in order to…break even on that ill-timed bet."

After being in the red for most of the year, silver is now up 4.4 percent in 2011.

Platinum prices for April delivery retreated 70 cents to $1,843.30 an ounce. It was the single precious metal to decline on Friday. Prices ranged from a low of $1,833.60 to a high of $1,849.50. Platinum, however, gained 1.6 percent this week and it is 3.7 percent higher for the year.

Palladium prices for March delivery surged $14.70, or 1.7 percent, to $857.70 an ounce. It ranged from $841.90 to $858.25. Palladium soared 5.3 percent this week and it is up 6.7 percent in 2011.

In PM London bullion prices, the gold fixing was $1,383.50 an ounce for a gain of $4.50 from the previous PM fixing. The London Silver fix was $31.94 an ounce, up $1.33. The platinum fixing rose $2 to $1,836.00 and the palladium fixing added $8 to $847.00 an ounce. All precious metals rose in London this week as well. Increases were 1.4 percent for gold, 6.5 percent for silver, 0.4 percent for platinum, and 3.0 percent for palladium.

United States Mint authorized buyers picked up more one-ounce bullion coins on Friday. Daily gains for the bullion American Gold Eagles and bullion American Silver Eagles were 15,000 and 50,000, respectively. In a rarity for most weeks, all United States Mint bullion coins advanced. Weekly gains ranged from 5,000 to 836,000. The latest United States Mint bullion sales figures follow.

U.S. Mint 2011 Bullion Coin Sales
Previous Weekly Gains Weekly Gains February 2011 Totals
American Eagle Gold Coin (1 oz) 25,500 20,500 58,500 189,000
American Eagle Gold Coin (1/2 oz) 0 5,000 5,000 6,000
American Eagle Gold Coin (1/4 oz) 0 14,000 16,000 18,000
American Eagle Gold Coin (1/10 oz) 0 95,000 100,000 120,000
American Eagle Silver (1 oz) 860,000 836,000 1,822,500 8,244,500

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