Gold & Silver Jump on Fresh Russian Tensions, Tropical Storm Fay & Poor US Data
From Chris Mullen at GoldSeek.com...
Gold and silver climbed higher throughout most of world trade on Thursday and ended near their highs of $838.95 and $13.86 respectively with gains of 2.86% and 5.49% for the day.
A jump in oil and a drop in the US Dollar – driven by increased financial and geopolitical worries – saw heavy buying of the safe-haven assets. The Gold Price in Euros rose €560 per ounce.
Gold and silver equities rose over 4% at the open, continued to rise throughout the day, and closed with about 6% gains.
Increased tensions between Georgia, Russia and the US and lingering concerns over what Tropical Storm Fay will do sent oil about 5% higher.
While these stories have been around for several days, most had expected both to have gone away by now and the market was forced to finally price them in.
Russia still has not pulled out of Georgia as had been hoped, rhetoric from Russia surrounding the missile defense deal between the US and Poland has increased, and Tropical Storm Fay continues to puzzle forecasters with its movements.
The US Dollar index saw significant losses as financial problems also refuse to go away and instead get even worse at firms like Lehman Brothers, Fannie and Freddie, and others. The false assumption of the past five weeks that drove the dollar higher was that the worst may have been behind us for the credit crisis and as more in the market re-realize that is not the case the greater trend of the long term bear market in the dollar resumes.
Another round of poor US economic data also reminded traders of just one of the many other fundamental reasons the dollar has been falling for some time and will likely continue to do so until that slew of problems is corrected, if possible.
Platinum gained $89 to $1453, and copper gained over 15 cents to about $3.56.
Treasuries fell as the Dow, Nasdaq, and S&P traded mixed for most of the day and ended near unchanged despite the financial and geopolitical worries greatly impacting other aspects of the markets.