Gold Bounces from 2.5% Loss as Oil Gains, Dollar Wobbles
From Chris Mullen at GoldSeek.com...
Gold and silver remained near unchanged in Asia on Wednesday before dropping more than 2.5% and 3% respectively in London and early New York trade.
Reaching one-month lows at $893.55 and $16.80 per ounce, both Gold and silver then stormed back higher into the close. Silver was able to end with a gain of 0.23%. Gold ended with a loss of 1.61%.
Both metals continued to gain in after hours access trade.
Crude oil fell to as low as $120.75 ahead of Wednesday's US stockpile inventory report, which analysts expected to show an increase in gasoline supplies to reflect recent demand destruction. But gasoline supplies surprisingly decreased instead and prices reversed to the upside after.
Crude inventories fell by 100,000 barrels, gasoline inventories fell by 3.5 million barrels, distillates rose 2.4 million barrels, and refinery utilization rose 0.1% to 87.2%.
The US Dollar index rose after the Euro tanked again on weaker than expected euro-zone business and consumer sentiment figures and US ADP Employment data came in much better than expected. But the Dollar then reversed course and ended just slightly higher after oil turned around and ended with an over $4 gain.
Treasuries mostly fell as the Dow, Nasdaq, and S&P generally rose on the better than expected private jobs data that raised some hopes over the health of the economy.
The Gold Price in Euros fell to a five-week low of €576, platinum fell $13 to $1726, and copper remained at about $3.68 as the July contract rolled into the August contract.
Gold and silver equities fell over 3% by midmorning, but they then rallied back higher for the rest of the day and ended with about 1% gains.
On the economic front, the ADP Employment report showed private-sector US payrolls growing by 9,000 in July, a surprise turnaround from analyst forecasts of 60,000 job losses.
Other economic highlights included the President's signing of the housing rescue plan, the Fed's extension of the Term of Emergency Lending Programs, and the 14.1% drop in US mortgage applications to the lowest level since December 2002.
Thursday at 13:30 GMT brings Initial Jobless Claims for 7/26 (expected at 395,000), plus Q2 GDP (expected at 2.3% growth), the Chain Deflator (2.3%), and the Employment Cost Index (0.7%).
Later in the day comes the Chicago Purchasing Managers Index (PMI) for July, expected at 49.0.
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