Precious Metals Market Report by Bill Musgrave – American Gold Exchange

Gold MarketsGold gained for the second in three sessions, edging up 0.2% to close at $1,161.50, as higher jobless claims pressured the dollar and boosted demand for alternative stores of value.

Initial claims for unemployment benefits rose by 12,000 last week, the most in two months, as layoffs crept up again. The unexpected rise underscores persistent weakness in the labor markets despite the recent downtick in the unemployment rate to 5.8%. More than 18 million workers still say they can’t find full-time jobs and wage gains are barely outpacing inflation.

New York Fed President William Dudley today added his voice to those of fellow regional Fed chiefs Eric Rosengren and Narayana Kocherlakota in saying this week that talk of raising rates is “still premature” because of high unemployment and low inflation. 

The dollar fell back after the jobless data, in part on speculation that it reduces pressure on the Fed to raise interest rates. In addition, U.S. foreclosures climbed 15% in October, the most since early 2010, raising more questions about the stability of the housing recovery. A softer dollar supports gold by making it less expensive to users of other currencies, as gold is denominated in dollars for international trade.

Gold Demand Trends for Q3, released today by the World Gold Council, shows India eclipsing China as the biggest gold consumer for the second straight quarter. Gold imports to India doubled in the period from June through September, with official purchases jumping more than 200 tons.

Central banks continued to boost gold reserves in response to currency risk and geopolitical, according to the WGC report, with net purchases of 93 tons in Q3 bringing the year-to-date total to 335 tons, up from 324 during the same period last year. Overall, global gold demand declined by 2.5% in the quarter, however, to just under 930 tons, the least since Q1 of 2009, as investors continue to digest the surge of demand in 2013.

The other precious metals finished lower except for silver, which was flat. Platinum dropped 0.5% while palladium lost 0.4%.

At the Comex close: December gold for delivery edged up $2.40 to $1,161.50; December silver was unchanged at $15.62; January platinum dropped $6.30 to $1,199; and December palladium lost $2.80 to $770.85 an ounce.

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