Big weekly gains for bullions

Gold futures finished with a modest loss on Friday, 12 July 2013 at Comex to break a four session string of gains, but the metal still scored its best weekly percentage gain in nearly two years.

Gold for August delivery shed $2.30, or 0.2%, to settle at $1,277.60 an ounce on the Comex division of the New York Mercantile Exchange. For the week, prices were 5.4% higher.

On Friday, September silver gave up 16 cents, or 0.8%, to end at $19.79 an ounce. The contract saw a gain of 5.6% for the week.

Friday's economic data revealed the largest increase in producer prices since September 2012 due to an unexpected jump in energy prices. June PPI rose 0.8%, up from a 0.5% gain in May, and well above the consensus expectation of a 0.3% rise. The energy index rose 2.9% in June after increasing 1.3% May. That is the biggest monthly increase since February. The pickup in energy costs was due to a 7.2% increase in gasoline prices.

Excluding food and energy, core prices remain on a weak trend. Prices increased 0.2% in June after increasing 0.1% in both April and May. The consensus expected these prices to increase 0.1%.

Prices also briefly turned a bit higher Friday following an unexpected decline in consumer sentiment. The preliminary July reading of the University of Michigan and Thomson Reuters consumer-sentiment index reportedly declined to 83.9 from a final June reading of 84.1. Market expected the reading to be unchanged. While employment levels have generally strengthened over the past few weeks, recent volatility in the stock market coupled with increases in oil and gasoline prices likely reduced overall sentiment levels.

The Current Conditions Index rose to 99.7 in July from 93.8 in June. That is the highest level since July 2007. Meanwhile, consumers became more concerned about the future. The Expectations Index fell to 73.8 in July from 77.8 in June.

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