Gold Falls on Dollar’s Rise and Inflation Data – 1/15/2010

by Bullion Prices Staff on January 15, 2010

New York gold declined 1.1% on Friday as the US dollar strengthened against other world currencies. Cited reasons for the greenback’s rally was news of tame US December inflation and concerns that China’s economy would cool with tightened credit. In other metals, silver retreated 1.2% and platinum fell 0.5%. New York bullion prices follow:

  • Gold for February delivery declined $12.50 to close at $1,130.50 an ounce. It ranged from $1,146.00 to $1,126.50.

  • Silver for March delivery lost 22.5 cents to finish at $18.430 an ounce. It ranged from $18.690 to $18.400.

  • April platinum fell $8.70 to end at $1,596.10 an ounce. It ranged from $1,621.80 to $1,592.80.

In PM London bullion prices, the benchmark gold price was fixed earlier in the North American day to $1,128.00 an ounce, which was decline of $10.25 from Thursday. Silver fell 6 cents to $18.520 an ounce. Platinum remained unchanged at $1,600.00 an ounce.

Notable bullion quotes follow:

"Investor interest in gold seems to be cooling off, as the renewed decline in gold holdings in the world’s largest gold [exchange traded fund], SPDR Gold Trust, indicates," metals analysts at Commerzbank said in a note that was cited on MarketWatch.

"It’s the dollar move driving prices,"Afshin Nabavi, a senior vice president at MKS Finance SA, a bullion refiner in Geneva, said on Bloomberg.

New York crude-oil for February delivery fell $1.39, or 1.8 percent, to $78.00 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 other news that affected gold prices, the US government reported on Friday that US inflation increased 2.7 percent in 2009 — the largest rise since 2007. By comparison, 2009 Inflation came in at 0.1 percent. However, the 2009 increase was mostly the result of higher energy prices, especially gasoline. And on a monthly basis, inflation tamely edged up just 0.1 percent in December after climbing 0.4% the prior month.

{ 0 comments… add one now }

Leave a Comment

Previous post:

Next post: