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Thursday, January 5, 2012

why gold silver prices down january 5 2012

why gold silver prices down january 5 2012 : Gold prices were losing steam Thursday as a stronger U.S. dollar and profit taking curbed gains. Gold and silver are pointing down Thursday after weekly U.S. payroll data showed a higher-than-expected jump and European banks scrambled to raise more capital on renewed credit concerns.

Gold for February delivery was losing $12.90 at $1,599.80 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,626.80 and as low as $1,597.80 an ounce while the spot price was down $14, according to Kitco's gold index.

Silver prices were shedding 33 cents at $28.76 an ounce while the U.S. dollar index was up 0.83% at $80.80.

The SPDR Gold ETF (GLD) was most recently sliding by 0.4% and the iShares Silver ETF (SLV) was slipping 0.6% after ADP reported that private-sector payrolls increased 325,000 in December, led by the service-providing sector and small businesses. Traders look to the data as an advance reading on the U.S. Labor Department’s jobs estimate, which will be released Friday, and includes information on both private- and public-sector payrolls. At the same time, investors discounted the latest report as numbers seemed to be inflated by seasonal issues. As noted in the WSJ’s Real Time Economics blog, the ADP report has a mixed track record compared to the official government data.

Economists are expecting tomorrow’s report to show a strengthening employment picture with overall nonfarm payrolls up around 150,000 in December, compared with 120,000 in November. The unemployment rate is also expected to rise to some 8.7% from 8.6%.

jobs during December.
Despite signs of economic strength in the US, investors are concerned about the state of Europe's banks following UniCredit's announcement Wednesday that it was selling new shares at a large 69 percent discount to Tuesday's closing price.

Banks are an integral part of the European debt crisis because they hold government bonds. A default or steep fall in the value of government bonds could inflict heavy losses on banks and choke off credit to the European economy. That's why regulatory authorities want Europe's banks to raise their buffers by e115 billion (149 billion) over the next few months. The worry in the markets is that banks will have to offer sharp discounts to raise the funds.

Positive economic news propelled US stocks to a big rally on Tuesday. Those gains held Wednesday as automakers reported strong sales in December. Retail chains are reporting their December sales Thursday. Most are positive, with Macy's raising its profit outlook for its fourth quarter because of strong holiday sales. But Target lowered its forecast in part because of weak sales of electronics. For the latest updates on the stock market, visit Stock Market Today

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