Modest gains for bullions on Friday

Bullions suffer substantial weekly losses though

Precious metals ended higher on Friday, 16 December 2011 at Comex. Prices rose as traders mulled over the fact that recent drop in price for bullions was overdone. Prices also rose as the dollar stayed steady. Despite Friday's gains, bullion registered substantial weekly losses.

Gold for February delivery ended higher by $20.7 or 1.3%, to end at $1,597.9 an ounce on the Comex division of the New York Mercantile Exchange on Friday. For the week, the yellow metal lost 6.8%.



On Friday, silver prices for March delivery rose $0.40 or 1.4% to end at $29.67. For the week, silver lost 8%.

In the currency market on Friday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies scaled back some of its gains after a better-than-expected result for a Spanish debt auction, and better-than-expected U.S. jobless claims data on Thursday. The dollar index climbed 0.03% later during the day after stocks dropped. The dollar rose to 11 month high mainly against the euro earlier during the week.

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.

The stock market bid higher in the early going on Friday, but for the second straight session its failure to overcome resistance resulted in selling that left the major averages to finish the week in relatively mixed fashion. Stocks benefited earlier from strong buying on above-average volume, which was inflated by quadruple witching options expiration.

But Dow pared all its gains after Fitch Ratings affirmed France's top Triple-A credit rating, but warned of a potential down grade for six other euro-using nations, placing Belgium, Spain, Slovenia, Italy, Ireland and Cyprus under review, calling a broad solution to Europe's debt crisis “technically and politically beyond reach.”

Among economic data for the day, the Labor Department said the consumer price index was flat last month on a seasonally adjusted basis, matching the forecast. Core prices that don't take food and energy into account climbed 0.2%