U.S. precious metals prices rose Thursday, with gold closing to its best level in five weeks and silver surging to a 31-year high.
April gold prices advanced $10, or 0.7 percent, to $1,385.10 an ounce on the Comex in New York — its best settlement price since January 13. Gold ranged between $1,374.60 and $1,385.00 an ounce. A weaker dollar, concerns over higher US inflation and safe-haven buying due to tensions in the Middle East were among the topics proffered for gains.
"The CPI data showed there is a lot of inflation around now. Certainly, inflation and the concern about the Middle East in general are very supportive factors," Bruce Dunn, vice president at bullion dealer Auramet, was quoted on Reuters.
Gasoline prices rose 3.5 percent in January and climbed 13.4 percent over the past year. Food price were up 0.5 percent in January — their biggest gain in more than two years. They are up 1.8 percent from a year ago. Stripping out the more volatile food and energy prices from the Consumer Price Index, the so-called core inflation rate came in with a relatively mild increase of 1.0 percent in January.
"The core rate is within the Federal Reserve’s guidelines, but most people who trade pay more at the grocery store and the gas station, so it’s hard to tell them inflation is non existent," John Person, president of NationalFutures.com said and was cited on MarketWatch. "Therefore gold is bid every time we get news of upticks in costs or government spending, both here, Europe and in China."
Another bullish factor for the yellow metal was a World Gold Council report which said that gold investment in China may gain between 40-50 percent this year.
"The main motivation behind this demand has been concern over domestic inflation pressure and poor performance of alternative investments, combined with expectations of further gold price gains," the World Gold Council said Thursday.
Silver prices for March delivery soared 94.1 cents, or 3.1 percent, to $31.570 an ounce. Silver ranged from $30.535 to $31.790 — its highest point since March 1980.
"Silver is playing catch-up to gold and will pull gold higher," Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, was quoted on Bloomberg. "The market has turned its attention to geopolitical fear, food inflation and the Fed not changing its stance."
Platinum prices for April delivery added $9.70, or 0.5 percent, to $1,844.00 an ounce. Prices ranged between $1,823.90 and $1,849.00.
Palladium prices for March delivery gained $4.50, or 0.5 percent, to $843.00 an ounce. It ranged from $833.25 to $847.00.
PM London precious metals prices were mixed. The PM gold fixing was $1,379.00 an ounce, marking an improvement of $7.75 from the previous PM fix. The London silver fix was $30.610 an ounce for a loss of 16 cents. Platinum gained $6.00 to $1,834.00. The palladium fixing declined $1.00 at $839.00 an ounce.
One-ounce United States Mint bullion coins advanced Thursday. The American Gold Eagle coins rose 4,500 and the American Silver Eagle coins added 42,000. The latest United States Mint bullion sales figures follow.
|U.S. Mint 2011 Bullion Coin Sales|
|American Eagle Gold Coin (1 oz)||43,500||174,000|
|American Eagle Gold Coin (1/2 oz)||5,000||6,000|
|American Eagle Gold Coin (1/4 oz)||16,000||18,000|
|American Eagle Gold Coin (1/10 oz)||100,000||120,000|
|American Eagle Silver (1 oz)||1,772,500||8,194,500|