Bullions shed luster

Upbeat U.S. economic data as well as good news from the euro zone reduce their appeal

Precious metals ended lower for second straight day on Thursday, 10 November 2011 at Comex. Bullions lost luster after the upbeat U.S. economic data, as well as good news from the euro zone helped buoy stocks at Wall Street today.

Gold for December delivery ended lower by $32 or 1.8%, to end at $1,759.6 an ounce on the Comex division of the New York Mercantile Exchange on Thursday. It fell to a low of $1,736.6 during intra day trading. Last week, gold gained 0.5%. For the month of October, gold gained 6.3%. It registered a rise of 8% for the third quarter ending September.



On Thursday, silver prices for December delivery fell $0.26 or 0.7% to end at $34.11. Last week, silver lost 3.4%. For the month of October, silver gained 14%. It registered a drop of 14% for the third quarter ending September.

Wall Street started and ended on an upbeat note on Thursday, 10 November 2011, as Italian bond yields retreated from the 7% level seen as unsustainable after an auction of Italian government bonds went better than anticipated, with Rome managing to sell its debt at 6.9%. Stocks also got some clue after former European Commissioner Mario Monti appeared to be in line to replace Silvio Berlusconi as Italy's prime minister and form a new government.

In Greece, Lucas Papademos, a former vice president of the European Central Bank, was named the new prime minister, after several days of contention over who would replace George Papandreou in the post.

Although participants remain focused on the events of Europe, worth noting was that the latest initial jobless claims tally totaled 390,000, which is down 10,000 from the prior week and less than the call for 400,000 initial claims. As for other data, the trade deficit for September eased down to $43.1 billion from $44.9 billion. That is less than the $45.9 billion deficit that had been broadly expected.

Also, reflecting lower costs of food, fuel and industrial supplies, total import prices declined 0.6% in October. Export price inflation also pulled back, down 2.1%, primarily led by lower agricultural prices.

In the currency market on Thursday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies shed almost 0.25%.