Gold and Silver Extend to New Highs


Fine Gold BarsU.S. gold and silver futures extended their gains Wednesday, with gold ending at a new record and silver closing at a fresh 31-year high. A weaker U.S. dollar was attributed for the gains.

June gold prices rose $3.80, or 0.3 percent, to settle at $1,498.90 an ounce on the Comex in New York. Gold ranged from a low of $1,493.80 to a high of $1,506.50.

"For the dollar, the S&P statement was like getting kicked when you’re already down," Matt Zeman, a senior market strategist at Kingsview Financial in Chicago, said and was quoted on Bloomberg. "The dollar is losing its status as the king of the hill, and gold is looking to take its place."

The S&P on Monday downgraded its long-term outlook for U.S. debt to negative. The U.S. dollar index fell Wednesday to its lowest level against the euro in 15 months.

Silver prices for May delivery surged 54.8 cents, or 1.2 percent, to $44.461 an ounce. Silver traded between $43.835 and $45.400.

In regards to silver, Jon Nadler, Senior Analyst at Kitco Metals Inc., pointed out the following in his daily commentary Wednesday:

As regards silver, the analytical team at Standard Bank (SB) notes that the patterns of accumulation in the ETFs that deal with the white metal warrant some caution. The team notes that:

"there has been a significant slowing down in ETF buying, as during the second half of 2010; we calculate that 3,105 tonnes were added to holdings. This raises a caution that, despite strong rallies this year, investor interest in silver is no longer as supportive as it was in 2010.

The SB team further observed that "this corroborates recent CFTC data which appears to indicate, through a dramatic increase in short silver positions over the past two weeks and last week’s fall in speculative longs, that there is a growing expectation amongst markets participants of a correction in silver prices. However, with reduced interest from ETFs, resistance to such a correction could be less than it was in 2010." Also of note is the fact that — according to Abraham Bailin, ETF Analyst at Morningstar — "silver has only been this expensive relative to gold twice in the last 25 years. Both of those instances lasted for only a few weeks before the ratio normalized. You would have to venture back to the 1970s to find any length of time when silver remained more fashionable than it is today."

Platinum prices for July delivery rallied $31.50, or 1.8 percent, to close at $1,802.80 an ounce. Platinum hit a low of $1,774.90 and a high of $1,813.90.

Palladium prices for June delivery soared $27.80, or 3.8 percent, to $758.90 an ounce. Palladium traded between $731.05 and $763.80.

Earlier London PM fixing prices matched the direction of precious metals futures in New York. Gains were made across all metals when comparing their Wednesday from Tuesday PM fixings.

The PM gold fix rose $10.50 at $1,501.00 an ounce. Silver added $1.57 at $44.790 an ounce. The platinum fix climbed $24.00 at $1,804.00 an ounce. Palladium advanced $22.00 at $759.00 an ounce.

U.S. Mint bullion coin sales, shown below, were unchanged from Tuesday.

U.S. Mint 2011 Bullion Coin Sales
April 2011 YTD 2011
American Eagle Gold Coin (1 oz) 56,000 319,500
American Eagle Gold Coin (1/2 oz) 0 22,000
American Eagle Gold Coin (1/4 oz) 0 40,000
American Eagle Gold Coin (1/10 oz) 15,000 175,000
American Gold Buffalo Coin (1 oz) 12,500 50,500
American Eagle Silver (1 oz) 2,101,000 14,530,000
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