Gold and Silver Climb Higher on the Week

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On Friday, gold (NYSEARCA:GLD) futures for February delivery, the most active contract, decreased $17.40 to settle at $1,660.60 per ounce, while silver (NYSEARCA:SLV) futures for March fell 51 cents to close at $30.41.

Both precious metals logged a modest gain for the week, breaking their six-week losing streak. Although, prices declined in the face of a weaker U.S. dollar and worse-than-expected trade data. The Commerce Department reported that the U.S. trade deficit increased nearly 16 percent to $48.73 billion in November, compared to a revised $42.06 billion in the previous month. Economists surveyed by Dow Jones Newswires had expected the trade gap to decrease to $41.2 billion.

However, bullion prices continue to receive support from global demand. New data released earlier in the week from the Census and Statistics Department of the Hong Kong government shows that gold imports by China totaled 91 metric tons in November, almost double October’s haul. Depending on December’s reading, total imports for 2012 could easily top last year’s amount by 400 tons. Meanwhile, Japanese pension funds, the second-largest stack of retirement assets after the U.S., may increase their positions in gold-backed exchange-traded products to 100 billion yen by 2015, more than double the present amount.

By the end of the trading day, the SPDR Gold Trust (NYSEARCA:GLD) decreased 0.57 percent, while the iShares Silver Trust (NYSEARCA:SLV) fell 1.01 percent. Gold miners (NYSEARCA:GDX) such as Yamana Gold (NYSE:AUY) and Newmont Mining (NYSE:NEM) declined 0.46 percent and 0.41 percent, respectively. Silver miners (NYSEARCA:SIL) such as First Majestic Silver (NYSE:AG) and Endeavour Silver (NYSE:EXK) both dropped more than 1.40 percent.

Shares of Agnico Eagle Mines (NYSE:AEM) avoided the pullback, as CIBC analyst Alec Kodatsky said the miner is best positioned to beat fourth quarter estimates, according to Benzinga. He notes that Barrick Gold (NYSE:ABX) has “little breathing room” for operation issues.

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Disclosure: Long EXK, AG, HL, PHYS

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