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Monday, October 13, 2014

Bullion prices edge lower

Gold manages to eke out first weekly gain in six weeks 


Bullion prices edged lower on Friday, 10 October 2014 at Comex with a stronger U.S. dollar trumping a further wave of risk aversion as global equities declined, taking a cue from a sharp selloff in U.S. stocks a day earlier. 

December gold futures fell $3.60, or 0.3%, to $1,221.70 an ounce but closed the week 2.4% higher, its first weekly gain in six weeks. 

December silver dropped 11 cents, or 0.7%, to $17.30 an ounce. 

A day earlier, gold jumped on Thursday as U.S. stocks tumbled in a move investors tied to a range of reasons, including worries about global growth and long-standing expectations the Federal Reserve will begin raising interest rates next year. 

Meanwhile, the dollar rose, with the ICE dollar index, a measure of the greenback against a basket of six rivals, gaining 0.4%. A stronger dollar can weigh on commodities priced in the unit by making them more expensive to users of other currencies. 

U.S. stock indexes are under pressure and have hit two-month lows, while other world stock markets are also selling off. U.S. Treasury bond and note futures prices are at contract highs on safe-haven demand. Late this week the focus of the market place has turned to the prospect of weakening world economies that could lead to still more monetary stimulus for the European Union, and could prompt the U.S. Federal Reserve to at least hold off on any plans to raise U.S. interest rates soon. The specter of anemic world economies also carries with it the risk of serious deflationary pressures. 

One feature in the market place this week is plunging crude oil prices. Nearby Nymex crude oil futures hit a two-year low of $83.59 a barrel early Friday. 

U.S economic data due for release on Friday included import and export price indexes, and the monthly Treasury budget statement. Export prices, excluding agriculture, decreased 0.2% in September after decreasing 0.2% in the prior reading. Excluding oil, import prices ticked down 0.1%, which followed last month's unchanged reading. 
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