Gold, Metal Prices Tumble as Dollar Strengthens – 12/17/2009

by Bullion Prices Staff on December 17, 2009

New York gold futures plunged on Thursday, as did silver and gold, after the dollar spurred ahead to strike a three-month high against the euro. Gold fell 2.5%, silver plummeted 2.8% and platinum declined 2.2%. New York precious metal figures follow:

  • Gold for February delivery plunged $28.80 to $1,107.40 an ounce. The yellow metal ranged from $1,142.90 to $1,101.60.

  • Silver for March delivery plummeted 49.8 cents to close at $17.195 an ounce. It ranged from $17.805 to $17.115.

  • January platinum fell $31.70, or 2.2 percent, to end at $1,425.90 an ounce. It ranged from $1,464.10 to $1,423.80.

In PM London bullion prices, the benchmark gold price was fixed earlier in the day to $1,117.00 an ounce, which was a decline of $20.50 from Wednesday. Silver retreated 20 cents to $17.400 an ounce. Platinum was settled at $1,432.00 an ounce, falling $25.00.

Notable bullion quotes follow:

"Too many people are short of the dollar, and when they start to cover, the dollar could have a lot of big days," Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois, said on Bloomberg. "I can’t see gold holding if the dollar rallies."

"As the markets get further confirmation that the U.S. economy is gathering strength, the dollar’s strength may force gold to slide lower," Pradeep Unni, a senior analyst at Richcomm Global Services, said on Reuters.

"It now appears that the rally in gold that followed the Fed announcement [on Wednesday] was nothing but after-hours smoke and mirrors," wrote Jon Nadler, senior analyst at Kitco Metals, Inc. "More of the same was manifest this morning: smoke from a 0.85 burn-out surge in the US dollar, mirrored by a more than $24 (2.13%) drop in the yellow metal."

New York crude-oil for January delivery fell a penny to $72.64 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.

For a gold coin news item of the day, read the US Mint press release about the end of 2009 UHR Gold Sales on December 31.

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