29/08/07: Gold trading bounces back

Yesterday (August 29th) saw gold futures for December delivery climb $1.90 on the New York Mercantile Exchange, while the price of spot gold also rose by over a dollar.

Benefiting from a return to confidence among investors, gold warehouse inventories rose by 43,873 troy ounces, while gold-backed exchange-traded funds StreetTracks Gold Trust and Market-Vectors-Gold Miners also showed positive increases in value.

On a good all-round day for gold trading, mining equities also recovered from Tuesday losses, with consumer confidence returning to the stock market at large.

The Dow Jones Industrial Average rose by 1.9 per cent yesterday, with all 30 components achieving positive figures, in a good sign of recovery from the previous day's sell-outs.

Gold investment looked to be a key beneficiary of the return to stock market confidence, with the particularly promising rise in the gold futures market allowing December delivery figures to rise above the $675 per ounce level.

Private economic research group the Conference Board had reported a worrying drop in consumer confidence this month, but the group insisted that recession is unlikely with the index still above 100.