Gold Falls Slightly, Silver and Platinum Advance – 12/15/2009

by Bullion Prices Staff on December 15, 2009

Gold turned up earlier on Tuesday after a Labor Department report showed that November wholesale inflation jumped. Producer prices rose 1.8% last month. However, gold tipped lower later in the day as the US dollar firmed, eroding the yellow metal’s appeal. Silver and platinum rose slightly. New York precious metal figures follow:

  • Silver for March delivery ended up 11.5 cents, or 0.7 percent, to $17.455 an ounce. It ranged from $17.1350 to $17.480.

  • Gold for February delivery fell 80 cents, or 0.1 percent, to $1,123.00 an ounce. It ranged from $1,130.00 and $1,112.00.

  • January platinum gained $5.50, or 0.4 percent, to $1,452.50 an ounce. It ranged from $1,431.80 to $1,456.40.

In PM London bullion, the benchmark gold price was fixed earlier in the day to $1,122.00 an ounce, which was a decline of $1.75 from Monday. Silver retreated a penny to $17.180 an ounce. Platinum was settled at $1,434.00 an ounce, falling $2.00.

Notable bullion quotes follow:

"It’s a dollar play for gold," Zhang Dajiang, a senior analyst at Pioneer Metals Group, was quoted on Bloomberg. "As long as the dollar stays resilient, we’re going to see volatility and some weakness in the gold price."

"The U.S. dollar is broadly stronger, pushing gold futures prices down," Sal Guatieri, senior economist at BMO Capital Markets, said on MarketWatch.

"Ebbing confidence was the theme on the global economic scene early on Tuesday morning. As has now been the case several times in recent months, when such a fade takes place, the US dollar quickly benefits from the rising jitters," wrote Jon Nadler, senior analyst at Kitco Metals, Inc. "A fresh, "safe-haven" bid boosted the US currency, while the euro and gold got clobbered pretty badly in early going."

New York crude-oil for January delivery advanced $1.40, or 2 percent, to $70.91 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.

The Labor Department’s Producer Price Index (PPI), which measures inflation pressures before they reach the consumer, soared 1.8% in November — the biggest gain in three months. Compared with a year earlier, producer prices moved up 2.4% — their first 12-month increase since November 2008. The annual wholesale inflation rate was 1.9% lower in October.

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