Mixed finish for bullions

Gold rises but silver drops

Bullion metals ended mixed at Comex on Thursday, 16 January 2014. Gold futures settled higher on Thursday as a decline in U.S. equities and weakness in the dollar helped prices score for their first gain in three sessions. Silver declined.

Gold for February delivery rose $1.90, or 0.2%, to settle at $1,240.20 an ounce on the Comex division of the New York Mercantile Exchange. Gold futures had tallied a loss of almost $13 an ounce over the past two trading sessions. On Wednesday, gold prices fell as investors bought up equities amid another batch of better-than-expected economic numbers.

March silver extended its losses to a third straight session, losing 8 cents, or 0.4%, to $20.05 an ounce.

In overnight news, China's so-called beige book quarterly survey of banks and businesses showed loans to consumers and businesses were hard to come by and that many loans were made to extend current loans. With the world economies and financial systems now being so closely inter-connected, any serious credit problems in China could quickly become a worldwide contagion.

It was also reported Thursday that the Euro zone's consumer inflation rate was up 0.3% in November from October and were up 0.8% on the year. These figures are well below the 2.0% inflation rate the European Central Bank has targeted as being optimal. Still, German Bundesbank President Jens Weidmann said Thursday he sees only a slight chance for deflationary pressures to envelop the European Union.

The dollar index slipped by 0.25% on Thursday.

At Wall Street, the day was heavy in terms of economic data. Weekly initial claims fell to 326,000 from a downwardly revised 328,000 (from 330,000) while the consensus expected the claims level to increase to 333,000. Since the end of November, the initial claims data have been plagued with biases from poor seasonal adjustments. According to the Department of Labor, those problems have now ended, and the data are giving an accurate read of current labor market trends. The continuing claims level increased to 3.030 million from a downwardly revised 2.856 million (from 2.865 million).

December consumer prices increased an in-line 0.3% after a flat November reading. The move in consumer prices was primarily the result of an upward swing in energy prices. After two months of declines, energy prices rose 2.1%. The gain contributed to a 3.1% increase in gasoline prices. Food prices increased 0.1% for a second consecutive month. Excluding food and energy, core CPI increased 0.1%, down from a 0.2% increase in November. The consensus expected core CPI to increase 0.2%.

Also, the January NAHB Housing Market Index fell to 56 from 58. Today's report was below the reading of 57 expected by the consensus. The January Philadelphia Fed Survey rose to 9.4 from 6.4 while market had expected a reading of 8.0.

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