Gold Bounces from $40 Loss as Crude Sinks; US Stocks Slide, Dollar & Bonds Rise on Economic Worries
From Chris Mullen at GoldSeek.com...
Gold fell almost $40 from Friday’s pre-Labor Day close by early trade in New York on Tuesday, bottoming as low as $790.60 per ounce.
Gold then rallied nearly 2% off that low into the close, but it still ended with a loss of 2.92% for the session at $804.90.
Oil fell below $110 for the first time since April as Gustav did not bring much damage to energy installations in the Gulf of Mexico.
Prices ended over $4 off their low of $105.46 as traders started handicapping several other developing storms together with the upcoming meeting of the Opec oil cartel. But crude still ended the day with a near $6 loss per barrel.
Silver dropped over a dollar to as low as $12.45 before it also rebounded, but it still closed with a loss of 4.05%.
The Gold Price in Euros fell to about €554, platinum lost $85 to $1392.50, and copper fell over 10 cents to about $3.32.
Gold and silver equities fell over 6% at the open and remained near their lows into the US close.
The US Dollar index rose on oil’s fall, while Treasuries also ended higher on disappointing economic data plus the Dow, Nasdaq, and S&P ending lower after rising to see 2% gains in early trade.
Worries over the global economy and the health of the financial system still seem to have many in the market extremely apprehensive. US Construction Spending slid 0.6% in July from Jun’s 0.3% increase, while the ISM index signaled contraction in the services sector with a reading below 50.
Wednesday at 10:00 EST brings the US Factory Orders report for July, expected to show 0.4% growth, and at 14:00 comes the release of the Fed’s Beige Book analysis of the US economy.