Gold Prices Trim Weekly Loss to 3%; Silver Advances but Falls 3.5% on Week

Gold Prices Trim Weekly Loss to 3%; Silver Gains to Cut Week’s Losson Week to 3.5%

U.S. gold prices rose for a second straight day Friday, trimming their weekly loss to 3.0 percent.

The yellow metal settled a few dollars from $1,800 an ounce after having hit an all-time high of $1,917.90 on Tuesday before a two-day correction kicked-in and drove prices down to their lowest level of the week at $1,705.40 an ounce.

MarketWatch recounts and quotes Brien Lundin, editor of Gold Newsletter:

"Everyone knew that gold had gotten ahead of itself and we needed to blow away the speculative froth," adding that traders who sold gold on Wednesday weren’t buying gold for the long term. "We needed to get back to the levels where investors think gold is not only a value, but a necessity," he said, and investors will "need to get accustomed to this type of volatility, to both the upside and downside."

On Friday, December gold prices advanced $34.10, or 1.9 percent, to $1,797.30 an ounce on the Comex in New York. The metal traded between $1,759.50 and $1,800.00. Gold’s weekly loss pulls down its 2011 gain to $375.90, or 26.4 percent.

"Bernanke said the Fed has more tools in the chest and he will use them as necessary, so that’s supportive to the gold market. That’s why we are seeing the bulls have things under control for the moment," Frank McGhee, head precious metals trader of Integrated Brokerage Services LLC, was quoted on Reuters.

Investors were glued Friday to Fed Chairman Ben Benanke’s speech in Jackson Hole, Wyoming. He provided few specifics, but said the "Federal Reserve will certainly do all that it can to help restore high rates of growth and employment" while warning Congress that they should not "disregard the fragility of the current economic recovery." Bernanke noted that it was "clear the recovery from the crisis has been much less robust" than hoped.

Forecasts are mostly split when it comes to gold prices next week, according to Kitco Metals Inc’s weekly gold survey.

"After gold’s $200-an-ounce price drop from nominal all-time highs of over $1,900, participants in the Kitco News Gold Survey are almost evenly split in their opinions, with a slight majority favoring higher prices…

In the Kitco News Gold Survey, out of 34 participants, 23 responded this week. Of those 23 participants, 10 see prices up, while six see prices down, and seven see prices sideways or unchanged. Market participants include bullion dealers, investment banks, futures traders and technical chart analysts…

Those who saw higher prices said they expected the fundamental issues that are supporting gold, such as the Eurozone debt problems or turmoil in the Middle East, to support prices…"

Weekly Gains and Losses in other Precious Metals Futures

Silver fell the furthest this week as it plummeted 3.5 percent. PGM metals diverged. Platinum lost 2.6 percent while palladium gained 1.0 percent.

In New York futures closings on Friday and in gains for 2011:

• September silver prices advanced 20.7 cents, or 0.5 percent, to close at $40.952 an ounce. It ranged from $40.120 to $41.335. Silver has gained $10.015, or 32.4 percent, in 2011.

• Platinum prices for October delivery rose $4.50, or 0.2 percent, to settle at $1,826.90 an ounce, as prices moved between $1,809.20 and $1,830.50. Platinum’s losses this week dropped its 2011 gain to 2.7 percent, or exactly half of where it stood last week.

• Palladium prices for September delivery advanced $5.20, or 0.7 percent, to close at $756.35 an ounce, trading from $745.25 to $759.00. Palladium remains at the bottom of all precious metals this year, having fallen 5.9 percent.

London Precious Metals Prices

London precious metals moved higher for the day. Gold and silver prices, in particular, jumped 3.4 and 5.3 percent. London Fix price comparisons between Friday (PM) and Thursday (PM) show that:

• Gold prices advanced $59.00 to $1,788.00 an ounce,
• Silver added $2.06 at $41.06 an ounce,
• Platinum advanced $12.00 to $1,812.00 an ounce, and
• Palladium added $1.00 at $747.00 an ounce.

The metals were pounded on the week, however. From biggest to smallest, losses included 3.2 percent for gold, 2.3 percent for platinum, 2.2 percent for silver and 0.4 percent for palladium.

U.S. Mint Bullion Coin Weekly Sales

Gains in bullion coins Friday were limited to the American Silver Eagle, according to the latest sales figures from the United States Mint. The Eagles climbed 30,000 for the day, bringing their weekly total to 795,000 and coming 38,500 away from matching sales in July. In a milestone this week, they topped 28 million in sales for the year. With more than four months remaining in 2011, less than 6.5 million need to be sold to break the all-time annual record of 34,662,500 which was set in 2010.

Other weekly, August and year-to-date bullion coin sales figures follow:

*The Gettysburg and Glacier America the Beautiful Five Ounce Silver Bullion Coins are sold out. Unlike other investment-grade products, the United States Mint does not provide daily per coin sales totals for the Olympic, Vicksburg, and Chickasaw America the Beautiful Five Ounce Silver Bullion Coins. Their individual totals are as of August 2. The five ounce combined coin totals above (last line) are as of August 22.

In related United States Mint news, the bureau this week resumed sales of commemorative gold coins and silver sets following suspensions.