Gold Prices Decline Slightly, Silver Dips Below $18 – May 20, 2010

by Bullion Prices Staff on May 20, 2010

U.S. precious metals were under fire Thursday as commodities as a group tilted or toppled lower. Concerns over slower (world) economic growth and weakened demand as a result were topics of the day. Industrial metals, therefore, were pulled down the most.

"Comex gold futures closed weaker and hit a fresh two-week low Thursday. More profit-taking pressure from the shorter-term traders was seen," wrote Jim Wyckoff of Kitco News. "Also, some long liquidation selling was featured, some of which was margin-call selling due to the downdraft in many other markets. However, the gold market did move off the session low as traders stepped in to do some bargain-hunting buying on the dip."

In New York precious metals prices, June gold closed $1,188.60 an ounce, falling $4.50, or 0.4%. The yellow metal hit a $1,175.00 low that was not seen since May 6, and a high of $1,198.20.

"Prices have come under pressure as profit-taking has emerged on the back of margin calls across other assets," Barclays Capital said in a note cited on Reuters.

July silver ended at $17.715 an ounce, declining lost 40 cents, or 2.2%. July platinum closed to $1,495.80 an ounce, down $109.90, or 6.8%. June palladium closed to $408.95 an ounce, plummeting $50.75, or 11.0%. Palladium has fallen 19% in two days, the most since 1998.

"Prices had gotten extended way too high, and it left the metal [palladium] particularly vulnerable to changes in the economic situation," Donald Selkin, the chief market strategist at National Securities Corp. in New York, said on Bloomberg. "People are looking at the overall macro picture now and thinking things are not going to be as good as they had hoped."

In London bullion prices, the afternoon gold fix was $1,192.00 an ounce for a loss of $3.00, or 0.3%.

"The flight-to-safety, tangible-asset crowd is still out there," Adam Klopfenstein, a senior market strategist with Lind-Waldock in Chicago, was quoted on MarketWatch. Their buying was "just not strong enough to keep us positive."

Silver was $17.930 an ounce for a decline of 60 cents, or 3.2%. Platinum was $1,515.00 an ounce, falling $97.00, or 6.0%. Palladium was $420.00 an ounce, down $52.00, or 11.0%.

In daily United States bullion coin sales, American Silver Eagles soared 203,500 to reach 14,190,500 for the year. American Gold Buffalo coins climbed 2,500 for year-to-date sales of 114,000. American Gold Eagles rose 17,000 to reach 459,000 for the year.

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