Precious metals register good weekly gains

Depressed economic reports make precious metals shine

Precious metal prices rose on Friday, 28 August, 2009. Prices rose as depressed economic data increased the appeal of precious metals as a hedge against inflation.

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 $958.8, higher by $11.5 (1.4%) an ounce on the New York Mercantile Exchange. For the week, gold ended higher by almost 0.4%. Year to date, gold prices are higher by 8.2%.

Gold ended July, 2009 higher by 2.8%. Before this, for the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (7.1%) since then.

On Friday, Comex silver futures for September delivery rose by 56.4 cents (4%) to $14.784 an ounce. For the week, silver ended higher by 4.3%.

Silver ended 2.7% higher for July, 2009. For second quarter, silver rose 4.5%. Year to date, silver has climbed 31.8% this year. For 2008, silver had lost 24%.

Among economic reports expected on Friday, data showed that U.S. personal incomes were unchanged in July as consumer spending increased 0.2%, led by higher outlays for autos and other durable goods. In a separate report, the University of Michigan/Reuters survey showed that U.S. consumer sentiment improved in late August, but not by enough to exceed the reading from July, 2009.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.