U.S. gold futures settled to a fresh record on Wednesday, extending its string of daily advances to seven. Meanwhile, silver prices soared 7.1 percent to a six-week high. Widening euro zone debt woes coupled with hints of quantitative easing from the Federal Reserve sparked safe-haven precious metals buying.
"People are getting currency exhaustion," Adam Klopfenstein, a senior market strategist at Lind-Waldock in Chicago, was quoted on Bloomberg. "With the Fed mulling over a possible QE3, which will dilute the dollar, gold is the main beneficiary."
August gold prices rallied $23.20, or 1.5 percent, to $1,585.50 an ounce on the Comex in New York. Gold touched a low of $1,564.60 and reached as high as $1,588.90. The latest gain put gold up 11.5 percent for the year.
"We have fear and contagion risks in Europe, and we are getting a rally of risk assets on the back of Bernanke alluding to the Fed trying to stimulate the economy, what people refer to as QE3," Jeffrey Sherman, commodities portfolio manager at DoubleLine Capital, was quoted on Reuters.
Federal Reserve Chairman Ben S. Bernanke told the U.S. House of Representatives Financial Services Committee on Wednesday that another round of stimulus was a possibility.
"The possibility remains that the recent economic weakness may prove more persistent than expected and that deflationary risks might reemerge, implying a need for additional policy support," Bernanke told Congress.
Silver prices for September delivery soared $2.517 to settle at $38.151 an ounce — the first time they have been above $38 since May 31. Silver traded between $36.015 and $38.340. Silver prices have surged 23.3 percent in 2011. Jim Wyckoff of Kitco Metals Inc. opined the following about silver on Wednesday:
"December silver futures prices closed near the session high Wednesday and hit a fresh six-week high. The silver bulls have the solid overall technical advantage and gained fresh power Wednesday.
The next downside price breakout objective for the bears is closing prices below solid technical support at this week’s low of $34.84. Bulls’ next upside price objective is producing a close above solid technical resistance at $39.37 an ounce.
First resistance is seen at Wednesday’s high of $38.35 and then at $38.80. Next support is seen at $37.50 and then at $37.00. Wyckoff’s Market Rating: 7.0."
Platinum prices for October delivery closed to $1,767.00 an ounce, advancing $30.70 or 1.8 percent. The metal ranged between $1,735.20 and $1,775.50.
Palladium prices for September delivery surged $16.55, or 2.2 percent, to close at $784.00 an ounce. They traded between $764.55 and $791.60.
London gold and silver prices jumped as well. When comparing the London Fix prices on Wednesday (PM) from those on Tuesday (PM), gold advanced $28.50 to $1,579.00 an ounce, silver prices rose $1.84 at $36.75 an ounce, platinum advanced $27.00 to $1,750.00 an ounce, and palladium rose $21.00 at $778.00 an ounce.
One-ounce American Eagle bullion coin sales increased Wednesday, according to the United States Mint. The Gold Eagles advanced 2,000 and the Silver Eagles added 206,500. The latest available bullion coin sales figures are provided in the table below:
|US Mint 2011 Bullion Coin Sales|
|Gold Eagle Coin (1 oz.)||2,000||16,500||524,000|
|Gold Eagle Coin (1/2 oz.)||0||1,000||56,000|
|Gold Eagle Coin (1/4 oz.)||0||0||64,000|
|Gold Eagle Coin (1/10 oz.)||0||5,000||255,000|
|Gold Buffalo Coin (1 oz.)||0||2,500||82,000|
|Silver Eagle (1 oz.)||206,500||1.320M||23.6235M|
|ATB Silver Bullion (5 oz.)*||0||2,800||348,800|
*America the Beautiful (ATB) Silver bullion coin sales figures are not published by the United States Mint daily. The current year-to-date figure has an "as of date" of July 11.