Gold Declines to Seven-Week Low – 12/22/2009

by Bullion Prices Staff on December 22, 2009

US gold futures retreated on Tuesday, pulled down by a strengthened dollar that benefited from positive economic news. The National Association of Realtors said sales of existing homes rose 7.4 percent in November. Additionally, the government reported that the gross domestic product (GDP) rose 2.2% from July through to September.

Gold ended down 0.8%. Other metals followed, with silver falling slightly and platinum declining 1.9%. More New York precious metal figures follow:

  • Gold for February delivery declined $9.30 to $1,086.70 an ounce. The yellow metal ranged from $1,098.20 to $1,075.20.

  • Silver for March delivery ended a half penny down to close at $17.030 an ounce. It ranged from $17.190 to $16.780.

  • January platinum fell $26.60 to end at $1,396.90 an ounce. It ranged from $1,427.40 to $1,382.00.

In PM London bullion, the benchmark gold price was fixed earlier in the day to $1,084.00 an ounce, which was a decline of $21.50 from Monday. Silver retreated 32 cents to $16.950 an ounce. Platinum was settled at $1,410.00 an ounce, falling $19.00.

Notable bullion quotes follow:

"Gold reacted to the dollar and the GDP data," George Gero, a precious-metals trader for RBC Capital Markets, said on MarketWatch. "It’s also off on year-end exits."

"The trend is your friend, and the trend right now is for lower gold prices as the dollar gains," Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois, said on Bloomberg.

"Following Monday’s give-up of Friday’s hard-fought gains, gold prices headed lower still. The yellow metal hit a fresh, six-and-a-half week low in spot levels, under $1085 per ounce," wrote Jon Nadler, senior analyst at Kitco Metals, Inc. "At least three culprits stood out in the suspect line-up like sore thumbs today as well: the dollar, thin market conditions, and profit-takers."

In other gold news, the Royal Canadian Mint said third party reviews fully account for the difference between its stock keeping records and the physical amount of precious metals on hand for the 2008 fiscal year.

In gold coin news, the US Mint is not expected to lower numismatic gold coin prices on Wednesday. The Wednesday London AM fix will need to settle under $1,053.50 an ounce to trigger lower prices for First Spouse Gold Coins, American Buffalo Gold Proof Coins, and Ultra High Relief $20 Double Eagles.

New York crude-oil for February delivery climbed 68 cents, or 0.9 percent, to $74.40 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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