Gold Hits New Record, US 2010 Fractional Gold Eagles Rise – June 17, 2010

by Bullion Prices Staff on June 17, 2010

U.S. gold prices closed to a record high Thursday as the dollar weakened, euro zone debt concerns continued and various economic reports were released that combined to cast doubts about the speed of a recovery.

"There’s background fear in these markets," Bill O’Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey, was quoted on Bloomberg. "Other shoes are going to drop in Europe. You don’t want to hold dollars, euros and yen. Gold has great appeal as an alternative and safety asset."

In New York precious metals prices, August gold rose $18.20 or 1.5% to $1,248.70 an ounce — the highest closing point on record. Its low was $1,231.00 while its high was $1,252.80, just off the all-time intraday ceiling of $1,254.50 an ounce which was hit on June 8.

"Gold is looking for any and every opportunity to go higher, and we all know the reasons why–the safe-haven factor, sovereign debt risks and so on," Peter Hillyard, head of metals sales at ANZ Investment Bank, said on on Reuters. "The mood is with gold right now, the momentum is with gold and the market will either do nothing or go up."

In other U.S. metal prices, July silver closed to $18.776 an ounce, jumping 33.5 cents or 1.5%. July platinum ended at $1,572.00 an ounce, edging higher by $4.50 or 0.3%. And September palladium closed to $481.25 an ounce, rising $6.05 or 1.3%.

In London bullion prices, the afternoon gold fix was $1,245.00 an ounce for an in increase of $10.50 or 0.9%.

"Weak U.S. economic data pushed the U.S. dollar index and stock indexes lower, and rallied the Euro currency, which in turn lent to fresh buying interest in gold," noted Jim Wyckoff of Kitco News. "Price action Thursday suggests traders are resuming notions that a weaker U.S. dollar is a supportive factor for gold."

In other London fix prices, silver was $18.500 an ounce for a gain of one cent or 0.1%. Platinum was $1,577.00 an ounce for a pick up of $9.00 or 0.6%. And palladium was $482.00 an ounce for the biggest percent gain of the metals at 2.3%, which equated to a rise of $11.00.

In one economic report released by the Labor Department on Thursday, annual inflation climbed 2.0% during the 12 months ending in May. The Consumer Price Index (CPI) retreated 0.2 percent in May. Historically, gold is often bought as a hedge against inflation, which the government’s latest reading shows is tame. However, some analysts opined how low inflation will enable the Fed to keep interest rates low, which is still beneficial to the metal.

The "the low US real interest rate environment fostered by U.S. monetary policy will continue to provide the support for higher gold prices, and we are maintaining our 6-month gold price forecast of ($1,275 per ounce) and our 2011 average gold price forecast of ($1,350 per ounce)," analysts at Goldman Sachs said in a report to clients on Thursday.

United States Mint bullion coins moved higher Thursday. The following table shows sales movement from Wednesday to Thursday, with the exception of the smaller sized 2010 fractional Gold Eagles which show increases between Monday and Thursday.

U.S. Mint Bullion Coin Sales in June

      Gains
American Buffalo Gold 25,000 27,500 2,500
American Eagle Gold 1 oz 45,500 53,000 7,500
American Eagle Gold ½ oz 28,000 30,000 2,000
American Eagle Gold ¼ oz 42,000 42,500 500
American Eagle Gold 1/10 oz 240,000 250,000 10,000
American Eagle Silver 1,724,500 1,861,000 136,500

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