Gold Declines on Dollar Strength and Easing Inflation


Fine Gold BarsStrength in the U.S. dollar again curbed the appeal of bullion as investors chose the greenback over the traditional safe-haven of gold. Declining U.S. inflation was also bearish for the yellow metal.

"Cautionary selling in gold continued after more euro zone headlines negatively affected the outlook for economic recovery and reform there. More portfolio managers are opting for cash and not entering into any risk," Reuters quoted George Gero, vice president of RBC Capital Markets.

Gold prices declined $7.90, or 0.4 percent, to $1,774.30 an ounce in the December futures contract on the Comex in New York. Gold traded between a low of $1,753.90 and a high of $1,784.80.

"The head-scratcher of the day/week/month is what gold is doing under the $1,900 or even the $1,800 levels with the crisis in Europe undergoing its most intense phase and with the Old World facing what Angela Merkel has called its ‘biggest challenge since WWII’", wrote Jon Nadler, Senior Analyst at Kitco Metals Inc. "Hint: look no further perhaps than them dollar bills in your pocket, as they now remain the ‘lesser of all evils’ for some — make that: for many."

On the inflation front, the U.S. Labor Department on Wednesday said consumer prices in October dropped for the first time in four months. Due in large part to falling gasoline prices, Americans paid 0.1 percent less for goods and services in October as compared to the 0.3 percent increase reported in September. On an annual basis, inflation rose 3.5 percent, down from the 12-month reading of 3.9 percent in September. Traditionally, gold has been a hedge against inflation.

(Check out the inflation calculator to see how the value of the dollar has changed over time.)

Silver prices for December delivery fell 63.4 cents, or 1.8 percent, to $33.822 an ounce. Silver’s low and high bracketed $33.57 and $34.63.

Platinum is riding the longest streak of precious metals losses at three straight days. Platinum prices for January delivery settled to $1,631.20 an ounce, falling $11.50, or 0.7 percent. The PGM metal hit an intraday low of $1,613.00 and reached a high at $1,649.00.

Snapping a string of two straight daily advances, palladium prices for December delivery fell $12.60, or 1.9 percent, to $654.45 an ounce. Palladium traded between $648.50 and $667.95.

London Precious Metals

With the exception of silver, London precious metals also shifted lower. London fixings on Wednesday (PM) from those on Tuesday (PM) had gold down $29 to $1,756.00 an ounce, platinum dipping $1.00 to $1,628.00 an ounce and palladium falling $6.00 to $655.00 an ounce. London silver gained 43.0 cents to $34.45 an ounce.

U.S. Mint Bullion Coin Sales

Sales of U.S. Mint bullion coins were unchanged Wednesday. The latest available daily, monthly, and year-to-date U.S. Mint bullion coin sales figures follow. All sales represent coin totals, not ounces of gold or silver coins sold.

Sales of U.S. Mint American Eagle and Buffalo Bullion Coins
  Daily Gains November Gains YTD 2011
American Gold Eagle Coin (1 oz.) 0 11,500 817,500
American Gold Eagle Coin (1/2 oz.) 0 0 65,000
American Gold Eagle Coin (1/4 oz.) 0 2,000 80,000
American Gold Eagle Coin (1/10 oz.) 0 5,000 360,000
American Gold Buffalo Coin (1 oz.) 0 1,500 146,500
American Silver Eagle (1 oz.) 0 819,000 37,294,500


Sales of America the Beautiful 5 Oz. Silver Bullion Coins*
YTD 2011
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 83,300
Vicksburg National Military Park 5 oz. Silver Coin 32,200
Chickasaw Park 5 oz. Silver Coin 24,400
TOTAL 393,300


*The United State Mint does not provide daily sales figures for its 5-ounce silver coins. The sales are current as of Monday, November 14, 2011.

Notify of

Inline Feedbacks
View all comments