Precious metals shine

Prices register modest weekly gains

Precious metals ended higher on Friday, 14 October 2011 at Comex. Prices turned higher following better than expected retail sales data from the Commerce Department. A weak dollar also boosted prices.

Gold for December delivery rose $14.5 or 0.9%, to end at $1,683 an ounce on the Comex division of the New York Mercantile Exchange on Friday. For the week, gold gained 2.9%. For the month of September, gold shed 11%. It registered a rise of 8% for the third quarter ending September.



On Friday, silver prices for December delivery rose $0.51 (1.6%) to end at $32.17. For the week, silver rose 3.8%. For the month of September, silver shed 28%. It registered a drop of 14% for the third quarter ending September.

The Commerce Department in US reported on Friday, 14 October 2011 that higher purchases of autos, clothing and furniture in September fueled the biggest increase in U.S. retail sales in seven months. Retail sales rose a seasonally adjusted 1.1% last month. Market had expected an increase of 0.8%. The increase in retail sales was boosted by demand for autos, which bounced back after a weak August performance. Auto sales spiked 3.6% last month — the biggest increase in a year-and-a half — as carmakers sold nearly 1.1 million vehicles. Excluding the auto sector, sales rose 0.6%, but that was still higher than market expectations of a 0.4% increase.

Sales for August, which were originally reported as unchanged, were revised up to a 0.3% increase. July sales were also revised higher. The report detailed that consumers also spent heavily last month on clothing as children went back to school and stores switched over to fall and winter clothing. Apparel sales rose 1.3%, the largest increase in seven months. Sales of home furnishings were also strong, up 1.1%.

In the currency market on Friday, the dollar index, which measures the strength of the dollar against a basket of six other currencies, ended lower by 0.3%.

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. But bullion metals have registered increase in prices despite strong dollar in recent times and vice versa