Gold Falls 4.2% in Weekly Loss, Silver Prices Gutted 27.4%, Bullion Coins Rise

by Bullion Prices Staff on May 7, 2011

U.S. bullion prices were mixed Friday but fell for the week. Silver was the metal in focus for most of that time, as it plunged for five straight sessions to register a 27.4% decline. The other precious metals were spared in contrast, as weekly losses were 9.6% for palladium and 4.2% for gold and platinum.

All but silver advanced on Friday, however. June gold prices edged up $10.20, or 0.7%, to $1,491.60 an ounce on the Comex division of the New York Mercantile Exchange. The metal moved between $1,471.10 an ounce and $1,498.50 an ounce.

July silver prices fell 95.3 cents, or 2.6%, to $35.287 an ounce, hurt by several increased margin requirements announced by CME Group throughout this week and last.

"The higher cash-margin requirements simply cannot be met by all participants, and when a trader can’t make margin, the underlying security is often liquidated," Lachlan Shaw, a commodity analyst at Commonwealth Bank of Australia, wrote in a note that was recounted on Bloomberg. "Further silver price falls are possible."

Although silver and gold suffered losses, the metals are up on the year by 14.1% and 4.9%, respectively.

In PGM futures prices, June palladium rose $5.50, or 0.8%, to $716.30 an ounce while July platinum advanced $8.20, or 0.5%, to $1,786.40 an ounce. In out takes from here and here over at CoinNews.net, Jon Nadler who is a Senior Analyst at Kitco Metals Inc. summarizes recent GFMS information on the two metals.

Platinum

"The latest in GFMS-sourced data indicates that the PGM niche is setting up for some interesting times ahead. In a nutshell, here are the relevant statistical and fundamentals-oriented GMFS finding for platinum:

  • Platinum registered a gross surplus of almost one million ounces in 2010, which represents an increase of 10% to the highest level in GFMS’ 12-year data series and it was the sixth consecutive year of a gross surplus being recorded.
  • There was a 16% rise in demand for platinum auto catalyst-related fabrication in 2010, but that offtake was well below pre economic crisis levels as sluggish recovery in Europe’s diesel sales was noted.
  • Chinese jewellery demand fell and it contributed to an overall 17% decline in platinum offtake for that sector.
  • Supplies of scrapped jewellery and scrapped auto catalysts grew by 30 and by 15 percent, respectively, as higher prices drew metal from such sources into the marketplace.
  • Platinum did benefit from lavish attention coming from ETFs and the trend made for a gain in prices last year, despite the growing surplus in the market.
  • GMFS projects a further sizeable gross surplus for 2011 in platinum, on account of rising mine supply.
  • Price projections made by GFMS see platinum possibly touching a high north of $1,900 before year-end.

We will have palladium statistics on offer for you in tomorrow’s commentary."

Palladium

"We now bring you the latest in palladium market fundamentals courtesy of the just-released analytical data from London-based firm GFMS. The corollary to the developments in the palladium niche last year was the market’s return to a deficit situation. GFMS labels the 550,000 ounce shortfall in the noble metal as a "substantial gross deficit." The turning into a deficit in palladium is the first such tilt since the year 2000. The rest of the supply and demand bullet-points shape up as follows:

  • Mine production of palladium climbed by 5% as South African output recovered its lost footing.
  • Scrap supplies of the metal grew by 20% on rising prices (the metal doubled in value in 2010).
  • Autocatalyst demand surged by 30% to 1.2 million ounces; a ten-year high.
  • Electronics-related demand for palladium witnessed a "notable" recovery, rising to a 10-yr high.
  • Jewellery demand fell sharply, declining by 300K ounces, primarily on lower Chinese demand.
  • Projections call for a once-again (albeit perhaps smaller than 2010) large gross deficit for 2011.
  • Palladium might achieve a $975/ ounce price in 2011.
  • ETF will likely continue to show "interest" in the noble metal
  • Russian palladium sales from government stockpiles might be trending towards a "winding down."
  • Russia may have sold as much as 800,000 ounces of palladium to the market last year.

In a nutshell, here is a precious metal that, unlike gold and silver, and unlike its cousin — platinum — is in a position of fundamentals-related strength, has two notoriously unreliable sources of supply (Russia and South Africa), and has a demand base of users (the world’s carmakers) who cannot afford to postpone buying it, cannot resort to convenient substitutions, and must incorporate it into every conveyance they build. Now that kind of amalgamation of market metrics is one that inspires investment confidence."

London precious metals PM fix prices fell against their previous PM fixings. The PM gold fix lost $24.50 at $1,486.50 an ounce. Silver stepped back $3.64 at $34.200 an ounce. The platinum fix declined $13.00 at $1,789.00 an ounce. Palladium retreated $8.00 at $721.00 an ounce. Weekly losses came in at 9.6% for silver, 1.6% for gold, 0.7% for platinum and 1.1% for palladium.

United States Mint Bullion Coins

Action was surprisingly strong for American Gold Eagle bullion coins on Friday. They advanced across the board, according to the latest figures released by the United States Mint.

2011 U.S. Mint Bullion Coin Sales
Daily
Gain
Weekly
Gains
May
2011
2011
Totals
1 oz American Gold Buffalo 1,500 4,500 4,500 63,000
1 oz American Gold Eagle 35,000 53,500 53,500 411,500
1/2 oz American Gold Eagle 3,000 13,000 13,000 46,000
1/4 oz American Gold Eagle 2,000 4,000 4,000 56,000
1/10 oz American Gold Eagle 5,000 10,000 10,000 210,000
5 oz America the Beautiful Silver* 0 54,400 54,400 237,800
1 oz American Silver Eagle 0 701,000 701,000 15,949,000

Figures above are in coins, not ounces sold.

*America the Beautiful Silver Bullion Coin sales have an "as of date" of Monday. These figures are generally reported by the United States Mint once a week instead of the normal daily updates published for other bullion coins.

London Bullion Prices

In London bullion prices, levels were down on Friday and on the week. When comparing the PM fixing prices on Friday from Thursday:

  • Gold lost $24.50, or 1.6%, at $1,486.50 an ounce
  • Silver declined $3.64, or 9.6%, at $34.20 an ounce
  • Palladium fell $8, or 1.1%, at $721 an ounce
  • Platinum lost $13, or 0.7%, at $1,789an ounce

Weekly losses were 29.8% for silver, 3.2% for gold, 7.2% for palladium and 2.5% for platinum.

{ 0 comments… add one now }

Leave a Comment

{ 1 trackback }

Previous post:

Next post: