US Gold Falls to One-Month Low as Dollar Rallies – 12/11/2009

by Bullion Prices Staff on December 11, 2009

A rallying US dollar drove New York gold futures lower on Friday. The greenback rose to a one-month high against other world currencies while the yellow metal finished toward a one-month low, marking a second straight weekly loss. Gains in retail sales and consumer confidence numbers were cited reasons for the dollar’s rise. A stronger dollar generally results in weaker gold prices.

New York precious metal figures follow:

  • Gold for February delivery fell $6.30, or 0.6%, to $1,119.90 an ounce. It ranged from $1,143.40 to $1,110.20.

  • Silver for March delivery declined 9.8 cents, or 0.6%, to $17.090 an ounce. It ranged from $16.900 to $17.640.

  • January platinum retreated $1.80, or 0.1%, to $1,422.70 an ounce. It ranged from $1,416.50 to $1,452.20.

In PM London bullion, the benchmark gold price was fixed earlier in the day to $1,124.00 an ounce, which was a decline of $4.50 from Thursday. Silver rose 12 cents to $17.510 an ounce. Platinum was settled at $1,429.00 an ounce, rising $13.00.

Notable bullion quotes follow:

"Gold is quickly approaching a key support level of $1,070 to $1,100," Brian Kelly, chief executive of Kanundrum Research, a commodities and macroeconomic research firm, said on MarketWatch. Kelly said gold will be more volatile next week as traders position for the Federal Reserve meeting.

"Clearly, dollar strength will make more recent gold buyers wonder if they have done the right thing. The action of investors will depend upon how committed they are to the long-term bull story in gold," Rick Bensignor, chief market strategist of broker Execution LLC in New York, was quoted on Reuters.

New York crude-oil for January delivery lost 67 cents, or 0.9%, to $69.87 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 related gold news on Friday, the US Mint said 2009 Gold Eagles return next week. The bullion coins were suspended due to enormous demand that depleted the Mint’s inventory. Fractional Gold Eagles in 1/2 oz, 1/4 oz and 1/10 oz sizes will be re-released on Monday. No additional inventory will be produced when those supplies are gone. The 1 oz coins will return on Tuesday.

"We will resume the sale of 2009 American Eagle Gold One Ounce Bullion Coins via the United States Mint standard allocation process on Tuesday, December 15, 2009," said U.S. Mint Director of Public Affairs Tom Jurkowsky. "We will continue the allocation of these coins until at least the end of December 2009, on a weekly basis."

The Mint anticipates production of the 2010-dated American Eagle Gold Coins to begin in January.

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