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Gold, Silver at 4.5 Week Highs as Bullion Sales Jump

The price of gold moved up to a four-and-a-half week high in trade on Thursday and maintained the ground by midday trade on Friday. Silver prices also gained as the U.S. Mint announced a temporary suspension of its 2013-dated American Eagle Silver Coin.

By midday Friday, the spot price of gold gained $1.39, or 0.07 percent, to $1,688.78 per troy ounce, retaining gains from trade on Thursday. U.S. gold futures for February delivery shed a nominal $1.90, or 0.11 percent, to $1,689.00 per troy ounce. U.S. silver futures for March delivery gained $0.13, or 0.39 percent, to $31.94 per troy ounce.

There was pressure in the metals markets, however, following the release of upbeat U.S. economic data that indicated fewer weekly jobless claims and jump in U.S. housing starts.

While upbeat news on the economy is generally good, it has an inverse effect with current market dynamics as it increases speculation the central bank will pullback on stimulus measure, which have been very beneficial to the gold and silver market. Additionally, upbeat economic news increases investor risk appetite and potentially draws money away from precious metals into investments such as equities.

The closing price for silver yesterday, at $31.8102 per troy ounce, represents the highest closing price for silver since December 17. As The U.S. Mint announces a temporary suspension of 2013-dated American Eagle Silver coins, after just ten days of availability, physical demand has been at record-breaking highs with the highest ever single-day sales at the U.S. Mint on January 7, 2013, when the newly dated coins initiated sales. Currently, sales levels for the month are over 6,007,000 ounces of silver from the U.S. Mint.

Last year, the Mint sold 33,742,500 ounces of American Eagle Silver Coins, selling out of the coins on December 17, 2012. Following that, there was a three-week hiatus during which time the Mint, who releases its products through a network of authorized distributors, took no new orders for American Eagle Silver Coins. When the January 7, 2013 release of the 2013-dated American Eagle Silver Coin arrived, the demand reflected not only desire for the newly dated coin but also the pent-up demand following the three-week hiatus.

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