Gold Prices Fall to $1,528 on Friday 10th June 2011

The price of gold fell outside the 10 week’s 10 point price movements this morning as weaknesses in commodities and a strengthened US dollar caused the price to drop $15 to $1,528 per ounce.

99.99% gold finesse tends to have an indirect relationship with the strength of the US economy and the dollar since the former is used as an insurance option for the international currency.  In this case, the latest damning news of the US economy caused the demand of gold to rise as the latest unemployment figures for the US were announced at a 10 year low of almost 10%.  The weekly jobless figures rose to 437,000, more than 4% higher than economists expectations.  In addition to this, the US Federal Reserve’s comments earlier this week that the rate of economic recovery for the USA was agonisingly low helped cause concern and speculative traders pinged their hopes on the rising gold index.

In addition to gold prices, other commodities such as silver and crude oil also fell by 1.8% to $36.91 per ounce and 1.1% respectively.

On the other side of the world, the price of gold reached a record high in Pakistan.  The price of gold reached $1,850 rupees per Tola on Thursday.  While the traditional wedding season is now over in Pakistan (which causes demand for jewellery in Pakistan for gold and silver to hike up), the rising value of the US dollar relative to the Rupee has been responsible for a 150 rupee price increase over the last 7 days.  A vice president for a large gold EDF company also stated that European demand for gold may cause a further hike in price due to the strengthening Euro against the Dollar.

Platinum and Palladium prices are expected to increase over the next few months as car manufacturers (which require these metals as auto catalysts in the engine) increase the demand for the resources.  After a poor car sales market in 2009/10, manufacturers such as Toyota and Jaguar (which saw a $1 billion profit in the last year) are set to boost demand.