Gold News

Gold Ends the Week 4.7% Lower as Oil Slides; Dollar Bounces with Stocks as Fed Promises Rate Cuts

From Chris Mullen at

Gold Prices traded mostly slightly higher in Asia and London on London before falling in New York trade and dropping as low as $778.90 per ounce by mid-morning.

The Gold Market then rebounded about 0.5% higher into the close, but it still ended with a loss of 1.52% for the session, some 4.7% down from Monday.

For November as a whole, the spot Gold Price held flat overall, hitting a near-record high of $848 at the top and a low of $773 amid strong volatility in all financial markets.

Silver on Friday dropped all the way to $13.77 per ounce before it rallied over 20 cents off that low, but it still ended with a loss of 1.76%.

Gold Priced in Euros fell to about €535 per ounce, platinum lost $5 to $1438, palladium gained $2 to $347, and copper rose over 7 cents to about $3.16.

Gold and silver mining equities found slight gains at the open, but they soon fell off with gold and silver and traded roughly 2% lower for the rest of the day. The HUI index lost 5.5% for the week.

On the economic front, US Personal Incomes and Spending both showed a 0.2% rise in October according to new data. Both came in below Sept.'s figure as well as below consensus forecasts.

The Core PCE measure of inflation was unchanged at 0.2%, while Construction Spending sank 0.8%. The Chicago PMI index of managers' expectations rose slightly, but Ben Bernanke’s comments on Thursday this week hinted towards further US Fed rate cuts to bolster the economy and fight "headwinds for the consumer in the months ahead,” though no action is likely to come until the central bank's next meeting on December 11th.

Next week’s economic highlights include the ISM Index on Monday, Productivity, Factory orders, and ISM Services on Wednesday, Initial Jobless Claims on Thursday, and November’s jobs data, Michigan Sentiment, and Consumer Credit on Friday.

Crude oil fell under $89 to make for the biggest weekly decline in two years as traders looked ahead to next week’s OPEC meeting, expected to officially boost output.

The US Dollar index continued its recent bounce higher as traders chose to ignore the otherwise bearish prospects of lower interest rates and argue instead that a lower Fed funds rate may help the US economy and therefore lead to Dollar strength.

Treasuries fell as the Dow, Nasdaq, and S&P opened markedly higher on Bernanke’s assurances, but the major stocks ended well off their early highs with just slight gains, and the Nasdaq ended lower on profit-taking from this week’s impressive 2.5% gains.

"With most market watchers hoping and praying for a Dollar bounce now, we are worried that the Dollar has suffered too much from a loss of confidence," says Julian Phillips of

"If the bounce is temporary the next Dollar fall could be steep. We see strong support lower down for the Dollar, with the Asian world growing ever-more positive on gold."

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Adrian Ash

Adrian Ash, BullionVault Gold News

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

See the full archive of Adrian Ash articles on GoldNews.

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