Gold Drops for Second Day, Touches $1100 – 1/21/2010

by Bullion Prices Staff on January 21, 2010

US precious metals prices finished lower on Thursday. Gold futures fell for a second consecutive day, touching below $1,100 an ounce before closing slightly higher. Gold’s decline was driven by a rising greenback. Other metals followed the yellow metal, with silver dropping 2.1% and platinum stepping back 1.6% . More New York bullion figures follow:

  • Gold for February delivery declined $9.40, or 0.8%, to close at $1,103.20 an ounce. It ranged from $1,117.40 to $1,088.00.

  • Silver for March delivery fell 37 cents to finish at $17.510 an ounce. It ranged from $18.065 to $17.340.

  • April platinum lost $25.50 to end at $1,592.10 an ounce. It ranged from $1,634.50 to $1,590.00.

In PM London bullion prices, the benchmark gold price was fixed earlier to $1,108.25 an ounce, which was down $12.00 from Wednesday. Silver fell 80 cents to $17.680 an ounce. Platinum was settled at $1,612.00 an ounce for a loss of $15.00.

"The next session or two will be very important," Matt Zeman, a metals trader at LaSalle Futures Group in Chicago, said on Bloomberg. "We need to see gold snap back fairly quickly. If gold can’t recapture the 50-day, you’ve got to get bearish very quickly."

"US currency continued its ascent on the trade-weighted index, receiving a further boost from safe-haven seekers spooked by the prospect of easy money supplies drying up all over the place," wrote Jon Nadler, senior analyst at Kitco Metals, Inc.

"As a result of the Chinese news and the ensuing surge in the US dollar, gold prices fell to just under $1100 during the overnight hours. The breach of that level could portend a test-target near $1075-$1080 should a close beneath $1112 materialize over the next couple of sessions."

New York crude-oil for March delivery plummeted $1.66, or 2.1 percent, to $76.08 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.

In related bullion silver news, United States Mint 2010 Silver Eagles sales were on fire during the first two days of availability. 2,480,000 were purchased between their release on Tuesday and to Wednesday. In less than 48 hours the US Mint sold over 8.6% of the total number of Silver Eagles sold during all of last year.

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