Gold Rises as Wholesale Inflation Falls – March 17, 2010

by Bullion Prices Staff on March 17, 2010

US gold edged higher Wednesday with no clear winner as to the main reason why, but instead several catalysts cited in swaying the yellow metal’s direction. Two such examples include the Fed’s announcement in the prior session to keep interest rates near zero and news from the Labor Department that wholesale inflation declined in February by 0.6% — double the amount many analysts were forecasting.

For the day, New York gold pared earlier gains to end up 0.2% while silver and platinum rose 1.0% and 0.3%, respectively. In more detail, April gold climbed $1.70 to $1,124.20 an ounce. It ranged from $1,121.00 to $1,133.90. May silver advanced 16.9 cents to $17.523 an ounce. April platinum ended up $4.90 to $1,635.60 an ounce.

"We’re in a bit of a transition where gold isn’t marching always in lockstep with the dollar," Brien Lundin, editor of the Gold Newsletter, said on MarketWatch. "We’re moving past the crisis of the past few years and investors in the east are looking at large deficits and debased currencies. As a result, the relative value of stuff, metals, and primarily gold, must increase."

In PM London bullion prices, gold was fixed to $1,121.75 an ounce for a loss of $3.00. Silver advanced 30 cents to $17.540 an ounce. Platinum was settled at $1,636.00 an ounce, rising $12.00.

"Current resistance in gold is seen up ahead at about the $1145 area and the January high is still a target to have to overcome. Support should emerge at near $1120 should the market turn lower," wrote Jon Nadler, senior analyst at Kitco Metals, Inc.

New York crude oil for April delivery ended up $1.23, or 1.5 percent, to $82.93 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 bullion coin news, United States Mint Silver Eagles sales are frozen. Their numbers have atypically remained the same since last Tuesday, with March numbers sitting at 1.175 million. By comparison, their weekly numbers shifted 750,000 higher during the prior seven day window and by 1.25 million before then.

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