Gold & Silver Bounce to End Tuesday Higher; Euro Sinks vs. Dollar on Weak German Data

From Chris Mullen at GoldSeek.com...

Gold and silver remained near unchanged in Asia on Tuesday before they dropped to $806.60 and $12.96 by midday in London.

But Gold and silver then soared higher in early New York trade and rose to as high as $830.52 and $13.715 by a little after 10:00 EST.

Both metals then fell back off a bit into the close, but they still ended with gains of 0.22% and 1.46% respectively.

The Gold Price in Euros rose to about €562 as the single currency fell sharply vs. the Dollar. Platinum lost $8 to $1416.50, and copper fell over 4 cents to about $3.44.

Gold and silver mining equities traded mostly slightly higher and ended near unchanged.

New US Home Inventories are still at a 10.1-month supply after falling the most since 1963 (5.2%). Builders have cut back markedly over the last several months to help add to what sales do occur.

While sales technically increased 2.4%, that was due to the fact that June’s figure was revised from 530,000 down to 503,000. All told, US home prices fell almost 16% year-on-year in June, according to Standard & Poor's.

Minutes from the Federal Reserve’s August meeting showed they expect inflation to moderate but fear upside risks. Weak consumer demand, a slowing global economy, and tight credit standards also had members worried.

The Fed's Committee continue to say they think the next move will be to raise rates, but also point out they remain data dependent. Such a move would also rely on the health of the financial system – still viewed as extremely fragile by many.

Also making news late Tuesday was that the number of US banks now on the regulatory watch-list has increased to 117, up from 90 at the end of the first quarter.

Crude oil rose on worries over Hurricane Gustav, now heading towards the Gulf of Mexico. Forecasts call for it to hit the Gulf over Labor Day weekend, but it may track south of most oil and natural gas rigs.

Continuing instability over Russia-Georgia also gave the bulls reason to buy.

The US Dollar founds new gains as more grim data out of Europe sent the euro lower once more. This time it was on weak German GDP data and because the Ifo German business survey for August fell more than expected to a three-year low.

Treasuries rose as the Dow, Nasdaq, and S&P remained near unchanged and ended mixed on worries over higher oil prices and conflicting economic data.

Wednesday at 13:30 GMT brings the Durable US Goods Orders report for July expected at 0.0%.