Gold Plunges on Rebounding Dollar, Silver Tumbles – 12/04/2009

by Bullion Prices Staff on December 5, 2009

Precious metal prices sank Friday as the US dollar showed strength following a government report showing that US employers cut fewer jobs than expected last month, with the unemployment rate retreating to 10% from 10.2%. Gold declined the most in a year, plummeting 4%. Silver and platinum fell 3.2% and 2.9%, respectively. New York bullion prices follow:

  • Gold for February delivery plunged $48.80 to end at $1,169.50 an ounce. It ranged from a high of $1,213.90 to a low of $1,147.40 — the weakest level in a week.

  • Silver for March delivery tumbled 60.8 cents to $18.520 an ounce. It ranged from $18.300 to $18.990, following Thursday’s high of $19.500, which was the highest level since July 2008.

  • January platinum fell $44.00 to close the day at $1,449.70 an ounce. It ranged from $1,433.00 to $1,497.40.

In PM London bullion, the benchmark gold price was fixed earlier in the day to $1,190.25 an ounce, which was decline of $18.50 from Thursday. Silver retreated 28 cents to $18.830 an ounce. Platinum was settled at $1,472.00 an ounce, for a lose of $22.00.

Notable bullion quotes of the day follow:

"So many people have piled into gold, so this pop in the dollar is freaking people out," Matt Zeman, a metals trader at LaSalle Futures Group Inc. in Chicago, said on Bloomberg. "The dollar is rocking and gold is getting its teeth kicked in."

"We’ve had a big move in a short period of time and it was clearly overbought. It was susceptible to a pullback. I don’t think this is a surprise," Caesar Bryan, who manages the $650 million New York-based GAMCO Gold Fund, said on Reuters.

"The pullback is related to the dollar reaction to the jobs data," James Steel, gold analyst at HSBC in New York, was quoted on MarketWatch.

New York crude-oil for January delivery fell 99 cents, or 1.3%, to $75.47 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 silver and gold news related to coins, the US Mint sent two memos to its authorized bullion purchasers reflecting the strong demand for its coins and the lack of silver and gold coin blanks. Those articles may be read at:

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