Gold, Silver Rise Friday but Plunge on Week, US Mint Bullion Coins Surge

Modestly paring weekly losses, gold and other precious metals rebounded Friday as the U.S. dollar pulled back and investors stepped in to buy on the bargain.

“Some people were taking the opportunity to scoop it (gold) up at lower levels. And, it’s still up year to date. So, it wasn’t surprising that people wanted to sell it off to raise cash for the year end,” Reuters quoted David Lee, metals trader at Heraeus Precious Metals Management in New York.

A stumbling euro had boosted the greenback for most of the week, and that translated into weekly losses of 6.9% for gold — its biggest weekly fall in nearly three months, 8.0% for silver, 6.5% for platinum and 8.9% for palladium. Palladium’s drop was perhaps a bit more stinging having been the only precious metal to rally last week.

On Friday, gold prices rebounded $20.70, or 1.3%, to $1,597.90 an ounce in the February futures contract on the Comex in New York. It was the yellow metal’s first increase in five days. Gold traded from an intraday low of $1,572.10 to a high of $1,603.50.

In dollars, gold plummeted $118.90 for the week. A reversal is in store, think some analysts, as the outlook for prices next week tilt more toward the bullish side — so states the weekly gold survey conducted by Kitco News whose previous survey showed more participants correctly inclined toward this week’s lower prices.

"After a sharp drop in value this week, participants in Kitco News’ Gold Survey lean toward the bullish side, but that view is certainly not dominant. 

In the Kitco News Gold Survey, out of 31 participants, 22 responded this week. Of those 22 participants, 14 see prices up, while eight see prices down, and zero see prices sideways or unchanged…

Those who are bullish gold primarily said it is because they are either taking a contrarian view after recent reports in the financial media calling for more weakness, or that they believe the break was too far, too fast…"

One week ago, Bloomberg reported that gold traders were at their most bullish since November 11. In last week’s Bloomberg survey, 18 of 26 participants have expected gold to rise as a result of Europe’s escalating debt crisis. In the latest Bloomberg survey, fewer are forecasting higher gold prices.

"Ten of 21 surveyed by Bloomberg expect the metal to gain next week, the lowest proportion since July 29. Three were neutral. While bullion’s slide of as much as 9 percent this week took its drop from the record $1,923.70 an ounce reached in September to almost 20 percent, the common definition of a bear market…

Commodities retreated the most in almost three months and more than $640 billion was wiped off the value of global equities on Dec. 14 after the Federal Reserve refrained from taking new stimulus measures."

With gold’s second straight weekly loss compiled, its increase in 2011 has shrunk to $176.50, or 12.4%.

Silver, Platinum, and Palladium Prices

Rounding out the precious metals action, silver prices for March delivery settled up 39.7 cents, or 1.4%, to $29.671 an ounce. Prices traded between a low of $29.120 and a high of $29.930. Silver’s $2.58 weekly loss pulled it into the red for the year, as it is now down $1.266, or 4.1%.

And in PGM metals, palladium prices for March delivery advanced $4.85, or 0.8%, to $625.50 while platinum prices for January delivery closed up $10.30, or 0.7%, to $1,417.30 an ounce. Palladium remains the worst performing major metal in percentage this year, down 22.2%, or $178.00. Platinum has fallen 20.3%, or $360.90 in 2011.

London Precious Metals

London precious metals advanced Friday like later closing New York bullion futures. When comparing each of the London fixings on Friday from those on Thursday (PM to PM):

• Gold rose $20.00 to $1,594.00 an ounce,
• Silver recovered 98.0 cents to $29.78 an ounce,
• Platinum gained $9.00 to $1,424.00 an ounce, and
• Palladium edged up 50.0 cents to $624.00 an ounce

And like the same aforementioned New York futures, London precious metals sank for the week as well — although to a bit lesser degree. London metal weekly losses were 6.7% for gold, 4.8% for platinum and a matching 6.9% for silver and palladium.

U.S. Mint Bullion Coins – Sales Soar

Weakness in precious metals has been extremely bullish for physical gold and silver in terms of U.S. Mint bullion coins. By mid-week each of the Mint’s one ounce bullion products already had December sales which surpassed their previous monthly levels.

Showing particular strength was the American Gold Eagle. Advancing 18,000 on Friday alone, the 22-karat coin surged 49,500 for the week. To place the number in perspective, that amount is more than each of the coin’s totals in October and November. December sales are at 65,500.

The 24-karat American Gold Buffalo advanced 2,000 on Friday to 13,500 for December — their highest monthly sales total since August 2011.

Uncharacteristically, the one ounce Gold Eagle and Gold Buffalo have advanced in nine of the last ten days.

Although weekly sales were lower for American Silver Eagle bullion coins, a solid 653,000 were sold since last Friday. The .999 fine coin is on pace to top 3 million for the month after slowing to 1.384 million in November — the coin’s weakest monthly level since July 2008.

In a bigger rarity, U.S. Mint America the Beautiful Five Ounce Silver Bullion Coins™ charged ahead by 2,400 Friday, advancing 2,800 for the week. Other recent weekly sales had been lucky to crawl forward by a few hundred.

The newest daily, weekly, monthly, and year-to-date U.S. Mint bullion coin sales follow: