Gold and Silver Prices Rise, America Bullion Coins Surge

by Bullion Prices Staff on December 13, 2010

U.S. bullion prices climbed higher Monday as gold was lifted to near $1,400 an ounce by a weaker greenback, bargain hunting and China’s announcement over the weekend that it would not hike rates.

"The gold market bulls regained some upside momentum Monday, helped along by a weaker U.S. dollar index and higher crude oil prices," noted Jim Wyckoff of Kitco News. "Also supportive for gold Monday was news that Chinese officials did not immediately raise interest rates after the Chinese government reported during the weekend that inflationary pressures are heating up significantly," added Wyckoff.

Gold futures prices for February delivery gained $13.10, or 0.9%, to $1,398 an ounce on the Comex in New York. The yellow metal closed near its intraday high of $1,400.20 and far away from its low of $1,380.80.

Goldman Sachs said in a report earlier on Monday that it expects gold to reach toward $1,690 in 2011.

"At current price levels, gold remains a compelling trade, but not a long-term investment. We expect that as U.S. real rates begin to rise in 2011, the cycle will turn, and gold prices will begin to move lower."

Silver futures prices for March delivery rallied $1.019, or 3.6%, to settle at $29.62 an ounce.

In PGM futures prices, palladium closed to $752.45 an ounce, rising $19.75, or 2.7%, and platinum finished at $1,697.30 an ounce, advancing $22, or 1.3%.

In bullion coins and news, the new five-ounce .999 fine silver coins were released by the United States Mint on Friday. (Read America the Beautiful Silver Bullion Coins available.) The coins were initially scheduled to launch five days earlier but enormous demand and low mintages resulted in higher-than-expected pre-sale prices. The United States Mint decided to delay their release and implement new terms and conditions for it resellers after consumer price complaints caused an uproar.

Flash forward to Monday and their availability is still in question. As a bullion product, the five ouncers are not sold directly by the U.S. Mint to the public — just like bullion American Eagles are not. Instead, the Mint relies on a distributors who buy in bulk and then resell to other coin dealers and precious metals providers. To keep prices down on the five ounce silver coins, one of the new conditions for these resellers is that they can only include a premium of up to 10%, plus a reasonable shipping and handling fee, and they can only sell directly to single buyers.

That creates issues for many of the resellers since their normal distribution channels are through larger companies, like coin dealers. Most do not directly sell to consumers. As such, many are still deciding on whether they will purchase the coins from the Mint at all. That is leaving a big hole for buyers who want them but simply can not find a source who has or will have them. It would appear the coins may be hold for several days before decisions are made. There are only 33,000 available for each of the five 2010 silver bullion coins.

In daily U.S. Mint bullion coin sales, American Eagles rallied. Until Monday, no new sales had been published by the Mint since Wednesday. The 1 oz America Silver Eagles roared to life with a daily pick-up of 730,000. That pushed them over 34 million for the year.

In gold bullion, the 1 oz American Eagles advanced 13,500 and topped 1.1 million for the year. Also climbing were the 1/10 oz Gold Eagles which gained 5,000, marking their first increase in December.

The latest sales follow:

December 2010 US Mint Bullion Coin Sales
  December 2010 Daily Gain 2010 Totals
American Buffalo Gold Sold Out 209,000
1 oz American Gold Eagle 22,000 13,500 1,106,500
1/2 oz American Gold Eagle 0 0 45,000
1/4 oz American Gold Eagle 0 0 60,000
1/10 oz American Gold Eagle 5,000 5,000 390,000
American Silver Eagle 1,422,000 730,000 34,312,500

Figures above are in coins, not ounces of gold sold.

In earlier bullion prices, the London PM gold fixing price was $1,399 an ounce to mark an advance over Friday of $23.75, or 1.7%. The silver fixing was higher by 54 cents, or 1.9%, to $29.33 an ounce. In PGM metals, palladium was $761 an ounce, up $24, or 3.3%, and platinum was $1,699 an ounce for a gain of $26, or 1.6%.

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