Prices drop after a long time as dollar heads up
Bullion metal prices ended lower on Friday, 04 December, 2009.
Prices fell in a long time since their roll started last November.
Prices dropped on Friday as the dollar headed strongly up on Friday
despite a better than expected job report at Wall Street which showed
unemployment rate falling back to 10%.
Generally, a stronger dollar pressures demand for
dollar-denominated commodities, such as crude oil and gold, which
become more expensive for holders of other currencies and also vice
versa.
On Friday, gold for December delivery ended at $1,168.8 an
ounce, lower by $48.6 (3.8%) an ounce on the New York Mercantile
Exchange. With Friday's losses, gold ended lower for first time in five
weeks. For the week, gold shed 0.5%.
Gold ended November, 2009 higher by 13%. Before that, for the
third quarter it ended higher by 8.7%. For the second quarter, gold
ended higher by 0.5%. The metal had gained 4.3% in the first quarter of
this year. On a year to date basis, gold price is higher by 32.6%.
On Friday, December Comex silver futures ended lower by 60.6
cents (3.2%) at $18.496 an ounce. For the week, silver ended higher by
1%.
In the currency market on Friday, the dollar headed strongly
up. The dollar index, which measures the strength of the dollar against
a basket of six other currencies, rose by almost 1.6%. Year to date,
the dollar index has dropped by almost 6.5%.
The Labor Department reported on Friday that U.S. nonfarm
employment fell by 11,000 in November, much better than the expected
drop of 150,000. In addition, previous months were revised to reflect
fewer job losses. In turn, unemployment decreased to 10.0%, from the
previous reading of 10.2%. Meanwhile, the average work week in November
clocked in at 33.2 hours, a tick higher from the 33.1 hours consensus
and 33.0 in October.
In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.
