Gold Declines 1.5%, Silver Advances 0.3%, US Bullion Coins Stuck


Fine Gold BarsGold declined 1.5% Thursday, extending a string of losses to six straight sessions. Among factors cited for dragging the yellow metal down were a stronger U.S. dollar and liquidation by funds to grab year-end profits.

"It wouldn’t surprise me to see that there is some fund selling of gold because of additional liquidation at the end of the year," Reuters quoted Adrian Day, president at Adrian Day Asset Management, which has $165 million in assets.

"The main problem going forward is the continuing strength of the dollar because no other major currency has much validity at the moment."

Gold prices ended down $23.20 to $1,540.90 an ounce in the February futures contract on the Comex in New York. Prices traded from $1,523.90 an ounce, the lowest level since July 7, to $1,562.80 an ounce.

"Some noted investors, such as leading hedge fund managers and billionaire George Soros, are reported to have been actively selling off their gold holdings recently, and the U.S. Mint’s sales of American Eagle gold bullion coins also dropped to a nearly 3 1/2 year low in November, reflective of slumping physical demand," noted Gary Wulf, contributor to Kitco News.

"The Mint also announced Thursday that with sufficient gold and silver on hand to meet anticipated coin demand, it will not allocate sales to dealers in early 2012, as has been the case for several years, due to  unprecedented demand and a lack of bullion supply." (Read about the upcoming 2012 bullion coins)

Despite gold’s recent losses, it is the only precious metal that has gained this year, advancing $119.50, or 8.4%.

Traders are "liquidating their gold positions before year end, locking in last-minute profits in a mad rush to raise capital ahead of the last 2011 market close," MarketWatch quoted Seth Rabinowitz, who covers commodities as a partner at Silicon Associates.

"Traders don’t want to watch the ball drop while worrying they have insufficient capital to start the new year on their strongest foot, particularly while pondering otherwise uncertain profits from the previous year."

Silver prices for March delivery advanced 8.1 cents, or 0.3%, to close at $27.315 an ounce. The white metal touched an intraday low of $26.145 and reached a high of $27.475.

Platinum prices for April delivery lost $25.60, or 1.8%, to $1,366.80 an ounce, ranging between $1,347.60 and $1,390.00.

Palladium performed the worst of the precious metals. Palladium prices for March delivery declined $23.40, or 3.6%, to $623.75 an ounce, trading from $621.05 to $641.30.

London Precious Metals

London precious metals losses were significantly more severe than later closing New York metal futures. When comparing each of the London fixings on Wednesday (PM) from those on Thursday (PM), gold fell $40.00 to $1,531.00 an ounce, silver declined $2.49 to $26.16 an ounce, platinum stepped back $54.00 to $1,354.00 an ounce and palladium lost $25.00 to $630.00 an ounce.

U.S. Mint Bullion Coins

After a strong December start, the sales pace for U.S. Mint bullion coins has plummeted in the last two weeks. The Mint has reported no gains for its American Gold Eagle bullion coins since December 16. Their monthly sales stand at 65,500, although the amount is notably higher than each of the two previous months.

American Silver Eagle bullion coins have been silent since a 100,000 pick-up on Thursday, December 22. Its previous increase was a gain of 103,00 on December 17. With December sales of just over 2 million, the level is less than one-third of the record month of sales in January at 6,422,000. Although again, the fast December start has put their sales above the atrocious month of November when just 1,384,000 were claimed.

The only bullion coin to maintain a somewhat steady sales pace has been the American Gold Buffalo. While no increases were reported Thursday, its December sales of 21,000 are the best since August.

The latest daily, monthly, and year-to-date U.S. Mint bullion coin sales follow:

Sales of U.S. Mint American Eagle and Buffalo Bullion Coins
  Daily Gains December Gains YTD 2011
American Gold Eagle Coin (1 oz.) 0 65,500 910,000
American Gold Eagle Coin (1/2 oz.) 0 0 65,000
American Gold Eagle Coin (1/4 oz.) 0 0 82,000
American Gold Eagle Coin (1/10 oz.) 0 0 370,000
American Gold Buffalo Coin (1 oz.) 0 21,000 174,500
American Silver Eagle 0 2,009,000 39,868,500


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 84,100
Vicksburg National Military Park 5 oz. Silver Coin 33,800
Chickasaw Park 5 oz. Silver Coin 26,400
TOTAL 397,700


*The United States Mint does not always provide daily sales figures for its 5-ounce silver coins. The sales are current as of Monday, December 19, 2011.

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