Bullion Prices and Business Weekly Update – August 7, 2010

Weaker-than-expected U.S. employment data set the direction of markets on Friday. The numbers rattled the dollar early and lifted gold which moved above $1200 an ounce and higher for an eighth straight session — its longest rally since November.

Silver tracked gold for the day and week, but platinum and palladium settled lower for both over concerns their industrial demand would weaken in a slowing economy.

Crude oil and U.S. stocks were punched lower Friday by the jobs data, but still managed sizable weekly gains as the major indexes grew between 1.50 and 1.90 percent. European stocks were lower on Friday but higher for the week as well.

In U.S. precious metals futures prices, gold for December delivery closed at $1,205.30 an ounce, gaining $6.00. The metal jumped $21.40, or 1.8 percent, for the week after falling 5.0 percent in July. (See July bullion prices.)

"The positive correlation of gold prices to the euro is re-establishing itself," Deutsche Bank AG said in a note. "Given our bearish outlook for the dollar, we believe this will trigger further gains in the gold price."

"We saw that negative correlation shift to a positive correlation between the dollar and gold since January, up until the last few weeks," RBS analyst Daniel Major said and was quoted on Reuters. "Gold is going to fall back more into its traditional relationship with the dollar."

September silver advanced 15.1 cents to close at $18.472 an ounce. Silver soared 46.9 cents, or 2.6 percent, for the week.

Platinum for October delivery closed to $1,570.80 an ounce, dropping $1.70 on Friday and $6.00, or 0.4 percent, for the week.

September palladium lost $8.45 to close at $487.60 an ounce. It fell $12.40, or 2.5 percent, for the week.

In London precious metals prices, the gold fix was $1,207.75 an ounce for a weekly increase of $38.75, or 3.3 percent.

"The echoes of China’s relaxing rules relating to gold import/exports and trading are still reverberating among the bulls; they have taken that bit of news and ran as far and as high as they could with it this week," noted Jon Nadler, senior analyst at Kitco Metals, Inc., early Friday.

"Given the fact that it was the first positive external news item to come into the market since mid-June, it makes some sense. Given the fact that it was the only positive news, well, maybe, the story has been overplayed."

In other weekly London metal prices, silver jumped 64.0 cents, or 3.6 percent, to $18.300 an ounce. Platinum settled at $1,571.00 an ounce, rising $16.00, or 1.0 percent. Palladium was $491.00 an ounce for a $4.00, or 0.8 percent, weekly advance.

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

London Fix Charts: Silver, Gold, Platinum and Palladium

(July 30 – August 6)

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).

July London Fix Precious Metals Prices

World Business News: Oil, Gasoline, and Stocks Prices

Crude oil prices dipped Friday, "hit by a renewed bout of worries about the economy and the impact on energy demand, with losses picking up steam as the dollar came off its lows," wrote Claudia Assis and Polya Lesova of MarketWatch.

"The fundamental news today is that the U.S. economy isn’t creating enough jobs," Tim Evans, an energy analyst at Citi Futures Perspective in New York, said and was quoted on Bloomberg. "There’s no indication that this situation will change anytime soon. There were already doubts about demand, and inventories remain elevated."

U.S. crude oil for September delivery fell $1.31, or 1.6 percent, to $80.70 a barrel. Despite Friday’s loss, oil rose $1.75, or 2.2 percent this week.

Prices at the pump climbed three-tenths of a cent between Friday and Saturday. The national average for regular unleaded gasoline is $2.779 a gallon, according to the daily AAA fuel report. The price is 4.1 cents higher than last week, 6.2 cents more than a month back, and 15.1 cents higher than a year ago.

U.S. stocks declined Friday, "after government data showed a larger-than-expected drop in July payrolls, giving investors a stark reminder the economic recovery remains slow," wrote Chuck Mikolajczak of Reuters.

"The jobs data is the key variable right now to the improving economy and an important indicator to the market — it’s mildly disappointing," Eric Teal, chief investment officer at First Citizens Bancshares Inc., said and was quoted on Bloomberg. "We’re just in a soft patch now. I just don’t expect to see strong improvement there until we get some of the larger macro issues behind us."

Friday closing figures for the three major U.S. indexes follow:

• The Dow lost 21.42 points, or 0.20 percent, to 10,653.56.

• The S&P ended down 4.17 points, or 0.37 percent, to finish at 1,121.64.

• The NASDAQ lost 4.59 points, or 0.20 percent, to 2,288.47.

For the week, the Dow advanced 1.79 percent, the S&P 500 gained 1.82 percent, and the Nasdaq rose 1.50 percent.

And in other world markets on Friday:

• The German DAX lost 73.95 points to 6,259.63.

• The Paris CAC 40 declined 48.14 points to end at 3,716.05.

• The London FTSE 100 fell 33.39 points to 5,332.39.

For the week, the DAX rose 1.82 percent, the CAC 40 climbed 2.00 percent and the FTSE 100 added 1.41 percent.

The U.S. economy lost jobs in the second month in a row due to the end of temporary census jobs and weaker-than-expected private hiring, Conway G. Gittens reports in this Reuters video.

Bullion and Business Articles

In related bullion, business and United States Mint news, interesting or quick-read articles from the week include:

• US Mint Sales: Sets and Gold Coins Big Gainers
  United States Mint weekly bullion coin sales slowed as gold and silver prices fell. …

  While gold has recovered some of its charge, the recent dip in prices has impacted US Mint bullion coin demand. Since last Wednesday — and before, the fractional American Gold Eagles have been frozen. The 1 oz Gold Eagles increased by just 9,000. Bullion American Buffalo gold coins edged 3,000 higher. American Silver Eagles performed better, rising 604,500. In a milestone, year-to-date sales have topped 21 million…

• July Silver Eagle Sales: Top 10 Month, Best July Ever
  American Silver Eagle bullion coins turned in slightly lower numbers for July 2010 than the month before, according to the most recent figures released by the United States Mint.

  While this may come as welcome news to collectors who have been hoping for a decline in the numbers to make way for proof versions, any celebration would be premature. True, sales of the strikes showed a drop of 20,000 units, but put in perspective, the decline is negligible…