Bullion Prices Fall as US Dollar Rallies – 2/3/2010

by Bullion Prices Staff on February 3, 2010

US bullion prices retreated on Wednesday, pulling away from two-day gains. Gold was driven lower as the US dollar rallied against other world currencies, and marked a two-week high against the yen. Helping the greenback, according to reports, was improved confidence that Friday’s jobs report will show growth. Silver and platinum followed the yellow metal. New York precious metals prices follow:

  • Gold for April delivery finished down $6.00, or 0.5%, to $1,112.00 an ounce. It ranged from $1,107.50 to $1,126.40.

  • Silver for March fell 42.6 cents, or 2.5%, to close at $16.317 an ounce. It ranged from $16.280 to $16.950.

  • April platinum lost $2.60, or 0.2%, to end at $1,576.20 an ounce. It ranged from $1,567.20 to $1,594.00.

In PM London bullion, the benchmark gold price was fixed earlier in the North American day to $1,115.25 an ounce, which was an increase of $4.25 from Tuesday. Silver rose a penny to $16.790 an ounce. Platinum was settled at $1,578.00 an ounce for a gain of $23.00.

Notable bullion quotes follow:

"Gold is trying to look ahead," Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said on Bloomberg. "If the government has to put together another round of stimulus, then that will set us up for an inflationary cycle with no growth. It plays to gold and all commodities."

"Although a convincing breach to above the $1,125 area would conceivably obviate a downtrend line in the metal, there is still repair work for gold to do at this time, not the least important aspect of which ought to be a return of interest (and actual accumulation) by the gold-backed ETFs," wrote Jon Nadler, senior analyst at Kitco Metals, Inc. "Said vehicles continued to shed small amounts in balances even as the yellow metal underwent its $40+ bounce over the past three sessions."

New York crude-oil for March delivery declined 25 cents, or 0.3%, to close at $776.98 a barrel. Gold, considered a hedge during times of high inflation and economic uncertainty, tends to follow oil and move opposite to the U.S. dollar. A rising greenback makes dollar-denominated commodities, like bullion, more expensive for holders of other world currencies.

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