Gold Falls Below $1,600, Silver Prices Close Under $30


Fine Gold BarsU.S. gold fell for a fourth straight session Monday, closing to its lowest price in two months. Gold, traditionally purchased as a safe investment in volatile markets, has not been a safe haven. The yellow metal declined $45 on Monday after plummeting $101.90 on Friday for its biggest single day loss since January 1980. Gold has given up $214.30, or 11.8 percent, in four sessions.

"Gold is one of the few assets that remain in positive territory this year, in a sense it is one of the last assets standing, and because of this as investors head for cash they sell the assets that have performed," Edel Tully, a London- based analyst at UBS AG, wrote today in a report that was referenced on Bloomberg. "While gold’s retracement was not really a surprise, the depth of its plunge certainly was."

In the December futures contract on the Comex in New York, gold prices declined 2.7 percent to settle at $1,594.80 an ounce. Gold rebounded from an earlier low of $1,535.00 but it was well-off Monday’s intraday high of $1,666.30. The settlement price was gold’s lowest since July 21. Despite recent losses, gold still remains 12.2 percent higher in 2011 — the only precious metal in the black for the year.

Late Friday, CME Group again raised margin requirements for trading gold and silver futures. That, and investor selling to cover losses in other markets were among factors analysts cited in pressuring gold prices.

"Hedge funds are caught wholly off-sides," said independent investor Dennis Gartman, according to Reuters. "The liquidation, whether forced or self-determined, has yet to run its final course."

Silver prices for December delivery declined 12.5 cents, or 0.4 percent, to close at $29.976 an ounce. Prices ranged between $26.150 and $30.970. The white metal has plunged $10.16, or 25.3 percent, in four sessions.

Jim Wyckoff of Kitco Metals Inc. wrote the following of silver in the Monday Kitco Roundup:

"December silver futures prices closed nearer the session high Monday after hitting a fresh 10-month low early on. Very serious near-term and longer-term chart damage has been inflicted recently.

However, Monday’s high-range close suggests the bears may have become exhausted at the lower price levels as selling interest dried up at Monday’s low of $26.15 and prices then rebounded strongly. If there is follow-through buying interest on Tuesday, then it would be a clue that a near-term market bottom is in place. However, at present prices are still in a steep six-week-old downtrend on the daily bar chart.

Silver bulls’ next upside price objective is producing a close above strong technical resistance at $32.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at today’s low of $26.15. First resistance is seen at Monday’s high of $30.97 and then at $32.00. Next support is seen at $28.00 and then at $28.00. Wyckoff’s Market Rating: 3.0."

Platinum prices for October delivery ended down $66.30, or 4.1 percent, to $1,546.90 an ounce, moving between $1,475.30 and $1,625.00.

Palladium prices for December delivery fell $15.10, or 2.4 percent, to settle at $627.40 an ounce, trading from $605.00 to $649.75.

London Precious Metals Fixings

Losses in London precious metals prices were more severe. In comparing PM fixings from Friday to Monday, the gold fix dropped $91.00 at $1,598.00, silver declined $4.74 at $28.16, platinum lost $81.00 at $1,570.00 and palladium fell $20.00 at $639.00.

U.S. Mint Bullion Coin Sales

U.S. Mint one-ounce bullion coins continued to enjoy sharp gains as their prices tumbled compared to previous days.

American Silver Eagle bullion coins rallied 1.025 million to register one of their best days in 2011. After an extremely slow September start, the increase brought their monthly total to over 3.3 million — an amount that already lifts September up to the 10th best ever month since the American Eagle introduction in 1986.

One-ounce American Gold Eagle bullion coins added 15,500, a level that is often considered high for an entire week.

In related news, the U.S. Mint on Monday suspended all of its collector silver products (non commemorative) as a result of volatile silver prices. The Mint’s online store indicates that they are "temporarily unavailable for product repricing."

The latest daily, September and year-to-date bullion coin sales figures follow:

Sales of U.S. Mint American Eagle and Buffalo Bullion Coins
Gold Eagle Coin (1 oz.) 15,500 62,000 734,500
Gold Eagle Coin (1/2 oz.) 0 1,000 62,000
Gold Eagle Coin (1/4 oz.) 0 2,000 72,000
Gold Eagle Coin (1/10 oz.) 0 20,000 340,000
Gold Buffalo Coin (1 oz.) 2,500 10,000 129,500
Silver Eagles (1 oz.) 1,025,000 3.3255M 32.2765M


Sales of America the Beautiful 5 Oz. Silver Bullion Coins*
Gettysburg National Military Park 5 oz. Silver Coin 126,700
Glacier National Park 5 oz. Silver Coin 126,700
Olympic National Park 5 oz. Silver Coin 81,500
Vicksburg National Military Park 5 oz. Silver Coin 29,400
Chickasaw Park 5 oz. Silver Coin 17,800
TOTAL 382,800


*The Gettysburg and Glacier America the Beautiful Five Ounce Silver Bullion Coins are sold out. Unlike other investment-grade products, the United States Mint does not provide daily per coin sales totals for the Olympic, Vicksburg, and Chickasaw America the Beautiful Five Ounce Silver Bullion Coins. The individual totals are as of Monday, September 19. The overall total is as of Monday, September 26 (700 additional five-ounce bullion coins sold since last week).

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