Gold, silver drop sharply; U.S. crude halts 4-session slide

San Francisco (Nov 5)  Gold and silver prices dropped sharply today as the dollar surged in the wake of the U.S. midterm elections.

Gold futures for December delivery slipped 1.9 percent to settle at $1,145.70 an ounce on the Comex in New York, after reaching $1,137.10, the lowest since April 2010. Trading was more than double the average for the past 100 days for this time of day, according to Bloomberg.

Silver futures for delivery in December sank 3.2 percent to $15.44 an ounce on the Comex, and reached $15.12, the lowest since February 2010.

Republicans gained control of the Senate from the Democrats in U.S. midterm elections and Bank of Japan Governor Haruhiko Kuroda said he saw no limit to the steps the BOJ may take to defeat deflation.

The Federal Reserve is moving closer to raising interest rates just as other central banks seek to spur their economies. Rising rates cuts gold’s allure because bullion generally offers investors returns only through price gains, while a stronger dollar typically curbs demand for a store of value. Gold futures are set for the first back-to-back annual drops since 1998 and the slump is causing losses for some higher-cost mining firms.

In other metals, palladium futures for delivery in December retreated 4.1 percent to $757.85 an ounce, the biggest drop since June. Palladium has gained 5.5 percent this year.

Platinum futures for January delivery fell 1.2 percent to $1,210.60 an ounce, the lowest settlement since July 30, 2009.

In energy trading, U.S. crude-oil futures finished higher today after a U.S. supply report showed a smaller-than-expected increase in crude inventories.

Light, sweet crude futures for delivery in December gained 1.9 percent to end at $78.68 a barrel. That halted a four-session losing streak that took prices to their lowest in three years.

December Brent crude on London’s ICE Futures exchange gained 0.2 percent to finish at $82.95 a barrel. That put an end to four straight sessions of losses that had sent Brent to a four-year low on yesterday.

The Energy Information Administration said today that U.S. supplies rose 500,000 barrels on the week ended Oct. 31. Analysts polled by Platts had expected an increase by 1.2 million barrels for the week.

Source: ProactiveInvestments