Gold Pares October Gain to 6.3%, Silver Prices Surge 14.2%


Fine Gold BarsGold stumbled $22 Monday, paring its monthly gain in October to $102.90, or 6.3 percent. Silver prices dived by nearly $1 on the day, but still finished up $4.27, or 14.2 percent for the month. A stronger U.S. dollar was blamed for the yellow metal’s daily loss, which silver tracked.

"The movements in the dollar … you have to chalk that up as the number-one negative for commodities in general on the day," Reuters quoted Bill O’Neill, partner of LOGIC Advisors in Upper Saddle River, New Jersey.

"It’s more of a risk-off day … gold has become a very choppy, volatile trading affair, which makes it a little less attractive as a flight-to-safety vehicle."

The monthly increases for the two major metals come on the heels of respective gold and silver losses in September of 11.4 percent and 28.0 percent.

On Monday, gold prices declined 1.3 percent to settle at $1,725.20 an ounce in the December futures contract on the Comex in New York. Gold traded between $1,705.50 and $1,746.50.

"The second central bank currency market intervention in as many months sent the US dollar soaring and gold reeling overnight as market players rushed for various entry and exit doors to take advantage of the overt move," noted Jon Nadler, Senior Analyst at Kitco Metals Inc.

"Last night’s maneuver resulted in the greenback reaching a three-month high against the yen. The massive unilateral (as opposed to what the SNB and other central banks did in early September) pressured the yen some 4% lower during the wee hours and saw gold lose ," added Nadler.

Leading precious metals, gold prices have surged 21.4 percent in 2011.

Silver prices for December delivery lost 93.4 cents, or 2.6 percent, to $34.354 an ounce, trading between $34.085 and $35.450. The white metal has rallied 11.0 percent this year.

Platinum and palladium also gained in October with respective 5.5 and 6.0 percent increases, but they declined on the final day of the month.

Platinum prices for January delivery ended down $44.20, or 2.7 percent, to settle at $1,607.60 an ounce. Prices touched an intraday low of $1,596.10 and reached a high at $1,650.50. Platinum has fallen 9.6 percent in 2011.

Palladium prices for December delivery closed at $651.15 an ounce, falling $17.20, or 2.6 percent. Prices ranged from $644.85 to $668.35. Palladium remains the worst performing precious metal on the year with its loss of 19.0 percent.

London Precious Metals

London precious metals declined as a group as well Monday. When comparing London fixings on Monday (PM) from those on Friday (PM):

  • Gold fell $19.00 to $1,722.00 an ounce,
  • Silver prices lost $1.18 to $34.24 an ounce,
  • Platinum declined $23.00 to $1,606.00 an ounce, and
  • Palladium retreated $1.10 to $653.00 an ounce

London precious metals gained in October with advances of 6.3 percent for gold and platinum, 12.4 percent for silver and 6.4 percent for palladium.

U.S. Mint Bullion Coin Sales

While the U.S. Mint has yet to finalize bullion coin sales for October, it did publish a daily gain of 100,000 for the bullion Silver Eagles — enough to put them over 3 million for the month. The daily increase would appear to have been the result of the sold out 2011 American Silver Eagle 25th Anniversary Set which had a 100,000 product limit and includes a bullion Silver Eagle as well as four collector versions.

The finalized bullion sales for October should be available Tuesday. The latest daily, monthly, and year-to-date U.S. Mint bullion coin sales figures follow:

Sales of U.S. Mint American Eagle and Buffalo Bullion Coins
  Daily Gains October Gains YTD 2011
Gold Eagle Coin (1 oz.) 00 46,000 806,000
Gold Eagle Coin (1/2 oz.) 0 3,000 65,000
Gold Eagle Coin (1/4 oz.) 0 6,000 78,000
Gold Eagle Coin (1/10 oz.) 0 10,000 355,000
Gold Buffalo Coin (1 oz.) 0 12,500 145,000
American Silver Eagle (1 oz.) 100,000 3,064,000 36,475,500


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 82,700
Vicksburg National Military Park 5 oz. Silver Coin 31,600
Chickasaw Park 5 oz. Silver Coin 22,300
TOTAL 390,000


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Gold Rate

We may have seen the last of $1600 gold if the cycle low holds. We might be heading to the generation where $2000+ gold is common.