Big weekly losses for bullions

Investors mull the likely nominees for U.S. Federal Reserve chairman

Gold futures closed lower on Friday, 13 September 2013 suffering a loss of almost 6% for the week as investors mulled the likely nominees for U.S. Federal Reserve chairman and the outcome of the central bank's monetary policy meeting next week.

Gold for December delivery fell $22, or 1.7%, to settle at $1,308.60 an ounce on the Comex division of the New York Mercantile Exchange. For the week, prices lost 5.6% from last Friday's close of $1,386.50.

December silver, which tumbled 4.4% on Thursday furthered its decline by 43 cents, for a 1.9% drop to $21.72 an ounce. It fell 9.1% on the week.

The Fed's QE program has helped support gold as QE tends to pressure the dollar and can lead to inflation. Gold is often seen as a hedge against inflation and dollar-denominated commodities benefit from a weaker dollar.

HSBC raised its 2013 average annual forecast for gold prices to $1,446 from $1,396 an ounce. It left its 2014 projection at $1,435.

Looking back at Friday's economic data, the retail sales and PPI reports conveyed a familiar message of modest growth and low inflation. August retail sales came in below expectations (0.2% v. 0.4% Briefing.com consensus), but the July reading was revised higher to reflect an increase of 0.4% (0.2% prior).

Separately, total PPI jumped 0.3% (consensus 0.2%) while core PPI, which excludes food and energy, was flat (consensus 0.1%).

Also, total business inventories rose 0.4% in July after increasing an upwardly revised 0.1% (from 0.0%) in June. The consensus expected business inventories to increase 0.3%. Manufacturer (0.2%) and merchant wholesaler (0.1%) inventories were known prior to the release. The only new information was that retailer inventories increased 0.8% in July after increasing 0.1% in June.

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