Precious metals end lower

Prices register weekly gains though

Precious metal prices ended lower on Friday, 13 January 2012 at Comex. Prices fell as dollar headed up for the day on Friday. Prices also fell due to profit booking. Nevertheless, prices gained for the week.

Gold for February delivery ended lower by $16.9 or 1%, to end at $1,630.8 an ounce on the Comex division of the New York Mercantile Exchange on Friday. It fell to a low of $1,625.7 during intra day trading. For the week, gold gained 0.9%. For the year 2011, gold rose 10%.



On Friday, silver prices for March delivery fell 60 cents or 2% to end at $29.52. For the week, silver rose 3%. For the year 2011, silver shed almost 11%.

In the currency market on Friday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies rose by almost 0.2%.

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 bullions have registered increase in prices despite strong dollar in recent times and vice versa.

During the week, gold was supported by news a day earlier that Chinese gold imports from Hong Kong surged to a record high in November for the fifth consecutive month. Mainland China's imports from Hong Kong climbed to 102,799 Kgs in November 2011 from 86,299 Kgs in October, 2011. Last year, China overtook India as the world's biggest market for gold, and the imports from Hong Kong are perceived as a proxy for overseas buying.

There are also reports of better physical demand for gold, especially from Asian countries, as the new year gets under way. Reports said with China's lunar New Year approaching and with the recent declines that were seen in gold prices, the Chinese are stepping in to buy physical gold.

Driving up the dollar and weighing on U.S. and European stocks and the broader commodities market, were news reports said ratings agency Standard & Poor's was set to announce later Friday that it had cut France's triple-A rating. The French finance minister reportedly confirmed that France has lost the blue-chip rating.

US data at Wall Street on Friday showed that the U.S. trade deficit widened by 10.4% in November, the largest gap since June and the biggest jump in the deficit since May. The deficit figure of $47.8 billion was well above $44.8 billion consensus forecast.