Gold Rebound, Silver at 7-Week High, Coins Bullish

Gold and silver made a rebound Thursday before a modest move lower in early trading Friday, erasing or nearly erasing the losses from a three-session losing streak during a U.S. dollar weakening and a spate of bargain hunting. Silver is currently leading the precious metals complex with a 2 percent gain and a close yesterday at a seven week high.

Negotiations surrounding the U.S. fiscal cliff, an automatic series of tax hikes and budget cuts set to take effect in January, continue to influence the market.

The spot price of gold quoted down $2.20 in early trade Friday to $1,724.25 per troy ounce. U.S. gold futures for February delivery traded down $3.90 to $1,725.60 per troy ounce.

David Beahm, vice president at precious-metals investment firm Blanchard & Co. said investors are taking advantage of Wednesday’s pullback and buying gold. He added that gold is up over $20 from Wednesday’s low and the buying trend will continue for the rest of this year and into 2013.

Gold has lost 1.6 percent on the week, but is up 0.3 percent for the month.

Simon Weeks, head of precious metals at Scotia Mocatta, said we’re back in the middle of a range as $1,750 is difficult to break. He added that a weaker dollar is the key factor supporting the price, but gold has still not fully recovered from Wednesday’s sell-off.

Commerzbank said in a daily market report on Friday that inflows of gold into exchange-traded funds highlighted strong demand for gold. It read that ETF investors are proof that gold remains in high demand as a store of value and safe haven despite all the price fluctuations.

Meanwhile, another 11,000 ounces of American Eagle Gold coins sold at the U.S. Mint on Thursday, bringing November sales totals to 131,000 ounces, the highest level for a monthly total since January 2011 when sales reached 133,500 ounces.

American Eagle Silver Coins also gained with a move of 75,000 ounces for a November total of 3,134,500 ounces. Only three months in 2012 produced higher sales with October at 3,153,000, September at 3,255,000, and January at 6,107,000 ounces.

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