Gold, silver fall as investors look for risk

AP News
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Posted: Mar 25, 2011 5:19 PM
Gold, silver fall as investors look for risk

Gold and silver prices fell Friday after a positive report on the economy sent investors searching for riskier assets.

The Commerce Department said the economy grew at an annual rate of 3.1 percent in the last three months of 2010. That was an upward revision from last month's 2.8 percent estimate, and a faster pace than many economists had predicted.

The stronger economic news sent stocks higher but pushed gold and silver lower. Both metals are seen as safe places to park money and tend to fall when investors become more comfortable owning higher-risk assets like stocks.

Gold fell $8.70, or 0.6 percent, to $1,426.20 an ounce. Silver fell 32.6 cents, or 0.9 percent, to $37.049 an ounce.

Silver is still one of this year's biggest winners in the commodities market.

It's up 20 percent for the year, while gold is up less than 1 percent. Silver has risen, in part, because it also has industrial uses. It's frequently used in portable electronic devices and in cell phones, said Spencer Patton, founder and chief investment officer for hedge fund Steel Vine Investments LLC.

In other metals trading, platinum fell $14.40, or 0.8 percent, to $1,745.60 an ounce, while palladium fell $1.85, or 0.3 percent, to $750.40 an ounce.

Copper fell 0.55 cents, or 0.1 percent, to $4.419 a pound. Demand for copper has been weak in China and supplies are growing, said Catherine Virga, director of research at CPM Group in New York.

Wheat fell 6.25 cents, or 0.9 percent, to $7.3325 a bushel. Wheat prices had risen earlier in the week on concerns that dry weather may have damaged the crop in parts of Texas, Kansas and Oklahoma. But prices fell a bit on hopes that the southwest portion of the Great Plains could get rain in the middle of next week, said Jack Scoville, vice president of Price Futures Group.

Corn fell 13 cents, or 1.9 percent, to $6.895 a bushel. Soybeans rose 3.75 cents, or 0.3 percent, to $13.5825 a bushel.

Other commodities were mixed. Oil fell 20 cents, or 0.2 percent, to $105.40 a barrel on the New York Mercantile Exchange. It's up 16 percent this year. Heating oil fell 0.72 cents, or 0.2 percent, to $3.0715 per gallon. Natural gas rose 16 cents, or 3.8 percent, to $4.403 per 1,000 cubic feet.