Precious metals end lower for second straight week

Prices turn pale as dollar surges due to retail sales data

Bullion metal prices ended considerably lower on Friday, 11 December, 2009. Economic data helped the dollar surge up and with Friday's losses, gold witnessed its second consecutive weekly loss.

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 $1,119.4 an ounce, lower by $6.3 (0.6%) an ounce on the New York Mercantile Exchange. For the week, gold shed 4.2%.

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 28%.

On Friday, December Comex silver futures ended lower by 8.9 cents (0.5%) at $17.084 an ounce. For the week, silver ended lower by b7.6%.

Among economic data on Friday, The University of Michigan index, released showed that consumer sentiment improved markedly in early December. The consumer sentiment index rose to 73.4 in early December from 67.4 in November.

Another report showed that the U.S. retail sales rose a better-than-expected 1.3% in November, the third increase in the past four months

In the currency market on Friday, the dollar shot up remarkably after the retail sales report. The dollar index, which weighs the strength of dollar against a basket of six other currencies rose by almost 0.8%.

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