Bullion & Business Monthly Report – January, 2010

Bullion prices fell this week, with gold and silver marking a second consecutive monthly decline in both New York and London. Gold’s fall has been driven significantly by a rising US dollar, which has climbed 2 percent against other world currencies in January. The yellow metal normally moves in the opposite direction of the greenback.

New York crude oil tumbled for a third straight week, and prices have plunged more than 8 percent this month. The dollar’s strength has also been a factor in oil’s negative direction, along with concerns over future demand.

US and European stocks stocks ended lower for the week and the month. The major US indexes fell between 3.5 and 5.4 percent in January.

For London Fix January bullion prices, gold fell 2.3 percent, silver declined 4.1 percent and platinum ended down 3.1 percent.

Gold on Friday was fixed at $1,078.50 an ounce, falling $5.50 or 0.5 percent for the week. Silver ended at $16.29 an ounce, for a weekly loss of 99 cents or 5.7 percent. Platinum was settled at $1,512.00 an ounce, losing $28.00 or 1.8 percent since last Friday.

For New York metals monthly prices for January, gold declined 1.1 percent, silver lost 3.9 percent and platinum retreated 3.2 percent.

Gold for April delivery ended at $1,083.80 for a weekly loss of $5.90 or 0.5 percent. Silver futures for March delivery ended at $16.190 an ounce, falling 74 cents or 4.4 percent on the week. Platinum for April delivery closed to $1,506.00, losing $38.50 or 2.5 percent.

Notable bullion quotes follow:

"Speculators are still liquidating gold, with no physical buying in sight," Andrey Kryuchenkov, an analyst at VTB Capital in London, said in a report cited on Bloomberg. "Bullion is still trading on the back of swinging currency markets."

"The strong dollar has been the primary catalyst for the sell-off in gold," Bill O’Neill, managing partner at Logic Investment Services, said on MarketWatch.

"The final session of the final January trading day in New York opened with a $1.50 loss in the yellow metal. Gold traded in a band of from $1078 to $1088 overnight, as few additional physical buyers (other than pre-Chinese New Year buyers) emerged to take advantage of yesterday’s [Thursday’s] further significant dip," wrote Jon Nadler, senior analyst at Kitco Metals, Inc.

"While a quick, relief-rally might still be in the cards provided the US dollar undergoes a bout of profit-taking-driven consolidation, the possibility of a breakdown below the $1070-1073 support area might engender selling that could extend all the way to the $1,050 and ultimately the $1,030 an ounce value zone for the yellow metal."

To follow are silver, gold and platinum performance charts, oil news, week-ending stocks, and precious metal article summaries.

London Fix Charts: Silver, Gold and Platinum

(Jan 22 – 29)

The London Fix is one of the most used bullion quotes around the world. The London AM fix for gold and platinum begins at 10:30am GMT (5:30am in New York), and the PM fix begins at 3pm GMT (10am in New York). The London Fix for silver begins each business day at 12pm GMT (7am in New York).

London Fix Precious Metals Prices

Weekly World Business News: Oil, Gasoline, and Stocks Prices

Oil prices fell on Friday "as strong U.S. reports on growth and sentiment boosted the dollar, pressuring commodities, while worries about earnings hit stocks on Wall Street," wrote Polya Lesova of MarketWatch.

"The dollar’s strength has got to be a major factor," Tom Bentz, senior energy analyst at BNP Paribas Commodity Futures Inc. in New York, said on Bloomberg. "There’s been a bearish trend all week. We’ve broken through some key support."

New York crude-oil for March delivery declined 75 cents, or 1 percent, to close at $72.89 a barrel. The price is 2.2 percent lower than last week, and represents a decline of 8.2 percent in January — the biggest fall since Dec. 2008.

Prices at the pump fell seven-tenths of a cent between Friday and Saturday. The national average for regular unleaded gasoline is $2.678 a gallon, according to a AAA fuel report. The price is 4.0 cents lower than last week, but 3.9 cents more than a month back. Average gasoline prices have jumped 83.2 cents compared to a year ago.

U.S. stocks tumbled on Friday, "capping their worst month since February 2009, as even a stronger-than-expected report of fourth-quarter economic growth and better-than-expected earnings from Microsoft, Amazon.com and Mattel failed to halt the recent slump," wrote Donna Kardos of MarketWatch.

"I think some of this is an indictment of what we’re seeing in the economy," Don DeWaay, CEO at DeWaay Capital Management, said on CNNMoney.com. "People are realizing that although GDP growth was good in the fourth quarter of last year, 2010 isn’t going to be as strong as had been thought."

For the week, the Dow fell 1 percent, the S&P declined 1.6 percent and the Nasdaq ended down 2.6 percent. For January, the indexes had respective declines of 3.5 percent, 3.7 percent, and 5.4 percent.

Friday closing figures for the three major US indexes follow:

• The Dow fell 53.13 points to close at 10,067.33 — the lowest level since Dec. 6.

• The S&P declined 10.66 points, closing to 1,073.87 — the lowest point since Dec. 6.

• The NASDAQ lost 31.65 points to end at 2,147.35 — the lowest level since Nov. 30.

And in other world markets:

• The German DAX gained 68.46 points to close at 5,608.79.

• The Paris CAC 40 rose 50.67 points, to close at 3,739.46.

• And the London FTSE 100 climbed 42.78 points to finish at 5,188.52.

Auto companies are looking to capitalize on Toyota’s missteps by offering U.S. consumers a $1,000 incentive to trade-in their Toyota vehicles. The following weekly video by Conway Gittens from Reuters recaps this, U.S. growth, and world stocks:

Bullion and Business Articles

In related silver and gold news, interesting or quick-read articles from the week include:

• Gold retreats as dollar rallies on back of stronger U.S. data – MarketWatch
  Gold futures fell slightly on Friday, as the dollar rallied on the back of strong U.S. economic-growth and consumer-sentiment reports, reducing the value of the precious metal as a hedge against weak currencies …

• Gold Falls for Second Month as Dollar’s Advance Erodes Demand – Bloomberg
  Gold fell, capping a second straight monthly decline, as a stronger dollar curbed the metal’s appeal as an alternative investment. The dollar climbed to a six-month high against the euro after a report showed the U.S. economy last quarter expanded …

• G(reat) Domestic Product. Not So Great Fundamentals – Jon Nadler, Kitco
  Gold was still headed for its second monthly drop this morning, as the US dollar’s robust gains kept a lid on the enthusiasm (and manifest bets) that were all the rage in the opening week of this year. The greenback took out the 79 level on the trade-weighted index this morning and albeit some of its latest gains may appear overdone for the moment, the lack of firmness in its rivals continues to make for attractive bets for currency and commodity market speculators …

• US Mint 2009 Annual Report: Bullion Revenue Record – CoinNews
  Fiscal year 2009 was filled with bittersweet coin news according to the recently released United States Mint 2009 Annual Report. Even with total sales of the organization responsible for American coinage at a recent high, net income and total seigniorage fell drastically in comparison. The economic recession is directly responsible for a majority of the newsworthy financial figures that were present in the report. Most notably, the record sales of bullion coins …

• US Mint Bullion Coin Sales Lead – CoinNews
  The amount of money coin collectors have been spending on numismatic coins has fallen since the middle of December, as a holding pattern is apparent by those who have already made their 2009-dated purchases and are awaiting the US Mint’s new offerings. The latest weekly sales report from the United States Mint is the least impressive in a very long time. Only three collector products showed improvements over the prior week …

For silver, gold and platinum price charts, see Bullion Prices Today.