Gold News

Gold & Silver Slide as Oil Sinks, Yen Rises, T-Bond Auction Sees Strong Demand

From Chris Mullen at

Gold and silver fell all through Asian and London trade on Wednesday before they accelerated their losses in New York and ended roughly 0.5% off their noontime lows of $904.85 and $12.73 with losses of 2.1% and 2.7 for the day.

The Gold Price in Euros fell to €656 an ounce. Gold Mining and silver equities fell roughly 5% by midday before they stabilized in afternoon trade, but they still ended with about 4% losses on the day.

Platinum lost $44.50 to $1093.50, and copper fell nearly 7 cents to about $2.15, as crude oil fell for the sixth straight session to almost $60 on continued worries over waning energy demand.

Wednesday’s impetus came from a larger than expected build in US distillate inventory data of 3.7 million barrels to an almost 25-year high. Gasoline stocks rose 1.9 million barrels while crude inventories fell by a less than expected 2.9 million barrels.

The US Dollar index was mixed and ended slightly lower as traders bought back borrowed Yen on worries over economic growth that prompted participants to unwind those trades in which they had borrowed yen to bet on higher yielding assets.

Treasuries jumped higher and the Dow, Nasdaq, and S&P erased most of their earlier losses as a Treasury bond auction of 10-year notes went much better than expected and eased fears over the government’s ability to sell debt.

Investors bid for 2.62 times the amount of debt available, versus an average of 2.40 at the previous 10 scheduled auctions.

On the data front, US consumer credit showed a much smaller than expected drop for May, and last week's mortgage applications climbed from a 7-month low.

Thursday at 08:30 EST brings Initial US Jobless Claims for last week, expected at 600,000, and then at 10:00 comes the Wholesale Inventories report for May expected at -1.0%.

Chris Mullen is chief content manager of the GoldSeek family of websites, a leading source of gold news, comment and mining-stock data for private and institutional investors.

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