Gold Prices Drop 2.3% in Week, Silver Dips 3%

A bevy of worries spread through volatile markets as precious metals, oil and U.S. stocks declined from levels of a week ago.

Among the factors analysts cited for this week’s gyrations were the Fed’s second round of "quantitative easing," Irish and Portuguese debt woes, currency movements, raised margin requirements for silver, profit-taking, a disappointing G20 summit, and, most recently, speculation of a Chinese rate hike.

In weekly commodity losses, gold prices fell 2.3%, silver lost 3.0%, platinum declined 4.8%, palladium retreated 1.7% and oil dropped 2.3%. Major U.S. stock indexes lost between 2.2 and 2.4%.

Gold futures prices for December delivery lost $37.80, or 2.7 percent, to close at $1,365.50 an ounce on the Comex division of the New York Mercantile Exchange. It was the biggest drop in four months. Prices fell $32.20 for the week, breaking a streak of three straight wins, including the 3.0 percent increase last week. The yellow metal is up 24.6 percent in 2010.

"We have a liquidation pattern across the board in every commodity market here," Adam Klopfenstein, senior market strategist with MF Global’s unit Lind-Waldock, said and was quoted on Reuters. "Gold and other commodities are going to suffer in the short run as a result of the change in the opinion in the marketplace that China might not be able to grow as fast if it is going … to rein in … inflation or to curb fast money that has been spurring the economy," Klopfenstein added.

December silver futures prices plunged $1.463, or 5.3 percent, to settle at $25.942 an ounce. Prices declined 80.6 cents this week. The fall snaps a string of three consecutive weekly gains, including last week’s 8.9 increase. Silver prices have soared 54.0 percent this year.

January platinum prices ended down $61.20, or 3.5 percent, to $1,684.60 an ounce. On the week, platinum lost $84.30. The metal climbed 3.6 percent last week and is up 15.4 percent in 2010.

December palladium prices lost $30.50, or 4.3 percent, to close at $673.65 an ounce. For the week, palladium retreated $11.75 after rising 6.2 percent last week. The metal has gained 65 percent this year.

In London bullion prices, the benchmark gold Fix price was $1,388.50 an ounce for a weekly loss of $7.00, or 0.5 percent.

"The hitherto "easy going" in precious metals got tougher all of a sudden last night as the realization that China’s first baby step on interest rates may soon turn into a full-on march sank in amid speculative players in commodities," said Jon Nadler, senior analyst at Kitco Metals, Inc.

"The Chinese "strategy" is really quite simple. It is the same one that will sooner or later be resorted to by the ECB and then the US Fed as well. Clearly, markets have grown uber-complacent about the near-zero interest rate environment and have been supporting over-the-top gains in many a commodity up to now," added Nadler.

Silver was fixed at $26.790 an ounce, rising 65 cents, or 2.5 percent, this week.

In other London weekly prices, platinum was fixed at $1,712.00, down $52.00 or 2.9 percent while palladium was $703.00 for an increase of $16.00 or 2.3 percent.

U.S. Mint Gold and Silver Bullion Coin Sales

Demand for U.S. Mint bullion coins soared this week following a strong performance last week. As always, bullion Silver Eagles took the lead. Weekly sales of the .999 fine silver coins rallied 1.685 million higher versus the prior pick up of 805,000. Buyers have ordered a record-breaking 30,570,500 in 2010.

One ounce bullion Gold Eagles came in second — again typical. They advanced 29,500 after last week’s increase of 10,500. The 22 karat gold pieces on Wednesday passed the 1 million mark in year-to-date sales — an event that has occurred only six times since the series was introduced in 1986. The fractional sizes also added to their tallies for the first time in November.

The following table shows the Mint bullion coin sales, as of Friday, November 12.

For always up-to-date coinage figures, visit the CoinNews.net page listing bullion coin sales.

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

London Fix Charts: Gold, Silver, Platinum and Palladium

(November 5-12)

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).

30-Day London Fix Precious Metals Prices

Business News: Oil, Gasoline, and Stock Prices

Crude oil dived more than 3 percent on Friday, yanking prices down for a weekly loss. The China news of a possible interest rate hike was attributed to the declines.

"Anything that provides evidence of a slowing Chinese economy is likely to be reflected in oil-demand estimates," Adam Sieminski, chief energy economist at Deutsche Bank AG in Washington, was quoted on Bloomberg. "It would also tend to moderate bullish views for where oil prices will be in 2011."

U.S. crude futures for December delivery fell $2.93 to $84.88 a barrel. On the week, oil declined $1.97, or 2.3 percent, after a modest 0.4 percent increase through the previous seven days.

Prices at the pump rose a penny between Friday and Saturday. The national average for regular unleaded gasoline is $2.886 a gallon, according to the daily AAA fuel report. The price is 5.2 cents higher than last week, 5.8 cents more than the price from a month back, and 24.1 cents higher than a year ago.

U.S. stocks slid Friday, with the Dow and S&P falling for four out of the prior five sessions.

"Good news is in short supply," Kim Caughey, senior equity analyst at Fort Pitt Capital Group, was quoted on CNNMoney.com. "The news coming out of the G20 and China as well as sovereign debt issues in Europe that seem to have bottled up have caught investors’ eyes."

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

• The Dow lost 90.52 points, or 0.80 percent, to 11,192.58.

• The S&P 500 declined 14.33 points, or 1.18 percent, to close at 1,199.21.

• The NASDAQ plunged 37.31 points, or 1.46 percent, to 2,518.21.

For the week, the Dow fell 2.20 percent, the S&P 500 ended down 2.17 percent, and the Nasdaq fell 2.36 percent. The weekly losses were the biggest in three months.

And in other world markets on Friday:

• The German DAX advanced 11.20 points to 6,734.61.

• The Paris CAC 40 retreated 36.23 points to settle at 3,831.12.

• The London FTSE 100 fell 18.36 points to 5,796.87.

On the week, the DAX edged down 0.29 percent, the CAC 40 lost 2.19 percent and the FTSE 100 declined 1.34 percent.

U.S. Week Ahead Business Video by Reuters

The pricing of GM’s IPO, Producer Price Index figures, Consumer Price Index numbers, and weekly jobless claims data are among the top stories to watch out for next week. These topics and more are covered in the following Reuter’s "The week ahead" business video:

Quick-read business article links follow: