Bullion Weekend Report – 10/31/2009

by Bullion Prices Staff on October 31, 2009

Precious metals pulled back this week as prices declined following a stronger US dollar. They were also hurt Friday with newly released economic reports, including one showing that consumer spending fell sharply in September. New York crude oil dropped the most in a month on Friday, yet still managed an October rise of 9 percent. Gold tends to follow oil and move opposite of the dollar.

In London bullion weekly figures, gold fell 2.0 percent, silver shot down 6.1 percent and platinum retreated 3.8 percent. Friday precious metals prices follow:

London silver closed to $16.57 an ounce, plummeting $1.08 from last Friday’s close. New York December silver futures ended at $16.255 for a $1.47 weekly plunge.

London gold was fixed at $1,040.00 an ounce for a $21.75 loss on the week. New York gold for December delivery finished at $1,040.40 for a weekly decline of $16.00.

London platinum ended at $1,320.00 an ounce, falling $52.00 since last Friday’s close. New York platinum for January delivery ended at $1,326.30 for a $43.20 weekly retreat.  

"If it appears that the dollar can strengthen, it can lead stocks down, and gold is going to slip," Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago," was quoted on Bloomberg.com. "Gold is just following moves in the dollar," McGhee said. The decline "could bode poorly for next week," he added.

"The market seems to have moved in this direction and, despite the [dollar] rally, bullish sentiment remains strong [for gold],” Merrill analyst Gustavo Soares wrote in a note indicating confidence in gold’s eventual rise to $1,500 an ounce "due to increased credit risk, dollar weakness and commodity strength," as stated on MarketWatch.com.

"It will also be interesting to see if FOMC members [next week] wear hawk or dove costumes to their own party," wrote Jon Nadler, Sr. analyst at Kitco Metals Inc. "For now, that kind of costuming is what makes for other masks also being worn on The Street – the bear or bull kind."

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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