Gold Prices Close at Record High, Silver Rises 1.8%

New York gold prices ended up 1.5 percent on Thursday to close at a new record and flirted with its all-time intraday high of $1,254.50 an ounce reached on June 8.

Other metals followed with their own gains. Silver jumped 1.8 percent, palladium advanced 1.3 percent and platinum rose 0.3 percent.

In other news, crude oil broke away from yesterday’s six-week high to finish a full percentage point lower and U.S. stocks edged slightly higher — of the major indexes, the Dow advanced the most but only by 0.24 percent.

New York precious metal figures follow:

• Gold for August delivery gained $18.20 to close at $1,248.70 an ounce. It ranged from $1,231.00 to $1,252.80.

• Silver for July delivery rose 33.5 cents to end at $18.776 an ounce. It ranged from $18.315 to $18.880.

• July platinum climbed $4.50 to $1,572.00 an ounce. It ranged from $1,563.60 to $1,579.50.

• September palladium added $6.05 to $481.25 an ounce. It ranged from $468.30 to $484.00.

In notable bullion quotes of the day:

"There’s no consistency right now in terms of good news coming out of the euro zone. And, because of that, it’s making investors feel a bit uncertain about going into riskier assets. Gold is obviously a safe-haven asset to offset that," Fred Jheon, managing director of U.S. product development at ETF Securities in San Francisco, was quoted on Reuters.

"Gold is defying the recent trend and starting to embrace its classic commodity theme and moving on a weak dollar," Adam Klopfenstein, a senior market strategist at Lind-Waldock in Chicago, was noted on Bloomberg.

"Weak U.S. economic data pushed the U.S. dollar index and stock indexes lower, and rallied the Euro currency, which in turn lent to fresh buying interest in gold," noted Jim Wyckoff of Kitco News. "Price action Thursday suggests traders are resuming notions that a weaker U.S. dollar is a supportive factor for gold."

In PM London bullion, the benchmark gold price was fixed earlier in the North American day to $1,245.00 an ounce, rising $10.50 from the price on Wednesday. Silver dropped a penny to $18.500 an ounce. Platinum settled at $1,577.00 an ounce, adding $9.00. Palladium advanced $11.00 for a second straight day to end at $482.00 an ounce.

Oil and gasoline prices

Crude oil prices fell "as the day’s round of macroeconomic reports made investors question the economic recovery and demand for oil, and as crude continued to take most of its cues from the stock market," wrote Claudia Assis and Nick Godt from MarketWatch.

"Inventories are generally still pretty high, but the oil price has held up well relatively," David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney, was quoted on Bloomberg. "Markets are still assuming a U.S. recovery, albeit an uneven recovery road."

New York crude oil for July delivery fell 88 cents, or 1.1 percent, to close at $76.79 a barrel.

The national average for regular unleaded gasoline rose seven-tenths of a cent to $2.707 a gallon, according to AAA fuel data. The current average is one-tenth of a cent more than last week, 15.2 cents less than a month back, and 2.8 cents higher than the average from a year ago.

U.S. Stocks

U.S. stocks "Stocks erased losses to end higher Thursday as a rally in commodity and consumer shares helped investors to look past dour reports on jobs and manufacturing," noted Alexandra Twin of CNNMoney.com.

"The economic numbers are still somewhat concerning," Brett Hryb, part of a group that manages $2.6 billion at MFC Global Investment Management in Toronto, was quoted on Bloomberg. "We have a very long-tailed recovery as opposed to a V-shaped bounce back. The gain in Treasuries and gold fall into the flight to safety. Gold is the net beneficiary every time the market is unsure."

The Dow Jones industrial average gained 24.71 points, or 0.24 percent, to 10,434.17. The S&P 500 Index rose 1.43 points, or 0.13 percent, to 1,116.04. The Nasdaq Composite Index edged up 1.23 points, or 0.05 percent, to 2,307.16.

In other economic news reported by the Labor Department today, annual inflation rose 2.0 percent, but consumer prices actually fell 0.2 percent in May. Leading price declines was the gasoline index, which plunged 5.2 percent during the month.

Gold, Silver, and Metals: Prices and Commentary – June 17, 2010

by Jon Nadler, Kitco Metals Inc.

The Creeping Art of Ultracrepidarianism

Good Morning,

You can count Spanish bond auctioneers among the few happy campers over in Europe this morning. The country’s 10 and 30-year sales of the debt instruments met with a warm reception albeit yields on the latter were up substantially from levels seen last month.

Moreover, the country is expecting to avail itself of less than a third of the "FROB" bank rescue fund that totals 99 billion euros, in an indication that its banking sector is far more solid than the market vigilantes would have one believe. The publication of US-style stress test results on Spanish lenders is imminent.

CDS spreads narrowed as a result, the euro gained additional traction (rising above 1.235 against the USD), and eurozone equities climbed as market players breathed a collective sigh of relief. At least for this round, Spain’s ‘we are not Greece’ routine worked. What happens when nearly 25 billion in debt matures in July, as they say, remains to be seen.

In overnight news, China wagged a menacing finger at those who are proposing that it discusses the topic of yuan revaluation at the upcoming G-20 summit saying that it was an ‘inappropriate’ venue for such a subject matter. Meanwhile, most of the country’s urban households (inhabited by the very people who helped push values to where they are) opine that home prices are ‘unacceptable.’

The same majority says that inflation is too high. A 68% Q1 gain in Chinese housing prices, no doubt, helped reinforce such majority opinion. As for inflationary pressures, the bidding war that is erupting among Chinese manufacturers for employees as well as scattered strikes demanding higher wages, should both serve as alarm bells for the government.

Precious metals prices continued to firm overnight as…well, for no other reason than momentum, really. That and the effects of the thinning ranks of participants remaining in the game as the lure of summer vacations continues to strengthen with each passing day. This, despite spectacularly familiar headlines such as ‘Last Chance to buy Gold ETF’ and ‘Gold Headed for $10000 by 2012’ [all that’s missing is the day and the hour].

A further attempt at a breakout to the upside was still being sensed among players as the New York session got underway. This is one train few dare to stand in front of in an attempt to test its braking capabilities. See a stronger euro, equities on the rise, and a modicum of calm in Europe. Not exactly the ingredients for a $10 pop prior to the opening in New York. The "European worries’ bit is wearing rather thin for this market, at this juncture. However, someone is running the Pamplona run weeks ahead of the real thing.

Speaking of which, the start of the Thursday trade had gold showing a $9.50 per ounce gain at the $1240.00 spot bid level. Some $12 stands between that figure and the early June record high, albeit the trading range is still seen as remaining in place and stretching from $1215 to $1255 the ounce.. Silver added 12 cents to open at the $18.59 per ounce mark, while platinum rose $7 to start at $1574.00 the ounce.

Palladium climbed $5 to the $477.00 per ounce level and rhodium was unchanged at $2380.00 per troy ounce. In the background, the US dollar was off by 0.48 at 85.72 and crude oil slipped 40 cents to the 77.27 mark — still near a six-week high, assisted by the weaker dollar and despite rising inventories. The euro was last seen trading at 1.235 while Dow futures edged lower on the unemployment data news.

US jobless claims rose by an unexpected 12.000 filings in the latest reporting week while May’s CPI fell 0.2% helped by lower gasoline prices. Recovery without inflation? What is this world coming to? Why, the carry-traders’ conclusion that under such conditions the hike in interest rates is still around a not-too-near corner, of course. This, of course, translates into: "Party On, Wayne!”

Something that did not get lost in translation is the keyword ‘ultracrepidarianism’ [Google THAT] as it applies to sci-fi theories described in the excellent blog entry by The Perth Mint’s Treasury expert Bron Suchecki. The article focuses on the non-existence of gold in the LME’s vaults. That’s right, the NON-existence of it. Confirmed. Right here: http://goldchat.blogspot.com/2010/06/truth-there-is-zero-gold-in-lmes-vaults.html but NOT for the reasons one might suspect. Thank you, Bron, for clearing the air. It is about time someone with real knowledge did it. Now THERE is a ‘whistle-blower…’

While on the subject of myth-busting, Bron also posted an utterly thorough and well-researched article on the matter of Australian Gold Confiscation. Read it here http://goldchat.blogspot.com/2008/11/australian-gold-confiscation.html and ponder the non-likelihood of same coming to the USA. Despite what certain commissioned sales ‘agents’ would have you believe. Agents most often heard on the Glenn Beck show.

Speaking of which, the final piece of myth-busting comes from veteran bullion dealer Bill Haynes of CMI Gold & Silver over in Phoenix, Arizona. Mr. Haynes updated his previous article on the myths surrounding gold confiscation scares, the reportability or non-reportability of certain transactions, and such, with a fresh article entitled: "The Dangers of Buying Gold" –in the wrong from, from the wrong sources, that is. Read it here: http://www.cmi-gold-silver.com/dangers-of-buying-gold.html and educate yourself. Thank you, Mr. Haynes. Your clients should be grateful for your educational efforts.

Jon Nadler
Senior Analyst

Kitco Metals Inc.
North America 

To see how the value of the greenback has changed over time, check out CoinNews sister site US Inflation Calculator.