Gold and Silver Prices Edge Lower as Dollar Gains


Bullion UpdateU.S. gold prices on Tuesday retreated for the first time in three days, dipping $7.70, or 0.6 percent, as the dollar rebounded from eight-month lows.

Other precious metals moved in the same negative direction. Palladium fell the most, dropping 1.4 percent. Silver followed right behind at 0.9 percent. Platinum declined the least at 0.4 percent.

Tuesday’s release of the Federal Reserve’s FOMC minutes from last month’s meeting suggested quantitative easing may be needed "before long." That message sent U.S. stocks slightly higher, with the major indexes hitting a fresh round of five-month highs as a result. The Dow added 0.09 percent, the S&P 500 gained 0.38 percent, and the Nasdaq climbed 0.65 percent.

New York precious metals closing prices follow:

  • Gold for December delivery fell to $1,346.70 an ounce on the Comex in New York. It ranged from $1,341.40 to $1,356.30.

  • December silver declined 20.2 cents to $23.147 an ounce. It ranged between $22.945 and $23.340.

  • Platinum for January delivery ended down $7.50 to close at $1,683.30 an ounce. It ranged from $1,677.00 to $1,702.00.

  • Palladium for December delivery lost $8.10 to $580.65 an ounce. It ranged between $576.30 and $592.20.

In notable bullion quotes of the day:

"The dollar trading higher against a handful of currencies is causing short-term bearish momentum in gold," Adam Klopfenstein, a senior market strategist at Lind-Waldock in Chicago, said and was quoted on Bloomberg. "It’s rational to expect a pullback after gold rallied to a record."

"The greenback’s slump (and expected further erosion on the heels of a yet-to-come easing) has been the single most identifiable catalyst for the feeding frenzy in certain ETFs that are geared towards emerging markets, commodities, and precious metals. In the case of gold and silver, pretty much the only identifiable factor," noted Jon Nadler, senior analyst at Kitco Metals, Inc.

"That is precisely the type of finding that should raise concerns, but is falling on bullish-inebriated ears. Such type of ‘hot’ money can, and does, move at warp speed when conditions appear unfavorable to those who direct its flows. Look no further than last Thursday’s mini-meltdown in metals amid spiking volumes in the GLD."

In PM London bullion prices, the benchmark gold Fix was $1,348.50 an ounce, down $3.00 from Monday. Silver was $23.030 an ounce, falling 28 cents. Platinum dipped 50 cents to settle at $1,685.50 an ounce. Palladium was $585.00 an ounce, gaining $1.00.

In coin news of the day, U.S. Mint bullion sales figures rose Tuesday, with the exception of the fractional fourth-ounce Gold Eagle. Silver Eagles gained the most, rising 475,000 since Friday. Tenth-ounce Gold Eagles came in second at 5,000. One-ounce and half-ounce sizes brought up the rear with their respective gains of 3,000 and 2,000.

The following are the current October sales from the United States Mint.

U.S. Mint 2010 Bullion Coin Sales
October 2010 Totals
American Eagle Gold Coin (1 oz) 38,000 925,500
American Eagle Gold Coin (1/2 oz) 3,000 39,000
American Eagle Gold Coin (1/4 oz) 0 54,000
American Eagle Gold Coin (1/10 oz) 15,000 370,000
American Buffalo Gold Coin (1 oz) Sold Out 209,000
American Eagle Silver (1 oz) 1,225,000 26,230,500


Oil and gasoline prices

New York oil prices declined slightly Tuesday, pressured by the stronger dollar. Prices increased briefly following the release of the FOMC minutes, but returned negative. Crude for November delivery lost 54 cents, or 0.7 percent, to $81.67 a barrel — the same settle as Thursday.

"Crude finished lower because people took a breather, despite the dollar weakening after the Fed minutes," Chris Dillman, analyst at Tradition Energy in Stamford, Connecticut, was quoted as saying on Reuters. "There are not enough bids when crude gets up around $83 and people are not convinced oil needs to be this high given the fundamentals."

The national average for regular unleaded gasoline rose four-tenths of a cent to $2.811 a gallon, according to AAA fuel data. The price is 7.9 cents more than last week, 11.2 cents higher than a month back, and 32.9 cents above the price from a year ago.

U.S. Stocks

U.S. stocks rebounded from earlier losses. The Fed minutes were commonly cited as a catalyst.

"The minutes supported the general notion that the Federal Reserve will be engaged in quantitative easing, and will formalize its policy" in the next meeting, David Kovacs, head of quantitative strategies at Turner Investment Partners in Berwyn, Pennsylvania, said and was cited on Bloomberg. "There is pretty strong empirical evidence that when there is quantitative easing, the liquidity that’s been added to the system finds its way into equities and there is a substantial rally."

The Dow Jones industrial average gained 10.06 points to 11,020.40. The S&P 500 Index added 4.45 points to 1,169.77. The Nasdaq Composite Index advanced 15.59 points to 2,417.92.

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