Gold News

Gold ends Thurs 0.65% higher as Fed injects $38bn to US money market

From Chris Mullen at GoldSeek.com...

The Gold Price remained near unchanged in Asia, gained a few dollars in London, and rose to as high as $736 in early New York trade before falling back and ending with a gain of 0.65%.

Silver rose to as high as $13.58 in early New York trade before it dropped to under $13.40 by late morning, but it also rallied back higher in afternoon trade and ended with a gain of 0.97%.

Gold Priced in Euros rose over €518, platinum gained $12 to $1357 to a new record high, palladium gained $3 to $341, and copper rose over 3 cents to about $3.67.

Gold and silver mining equities rose over 1% at the open before they fell back near unchanged by late morning, but they then rallied back higher in afternoon trade and ended with over 1% gains.

In the United States, the Federal Reserve injected a huge $38 billion in liquidity, the largest amount since August, to ease tight credit conditions. (For more on the current flood of central bank money, and What Inflation Means for the Gold Price, read on here...) Initial jobless claims for last week came in below forecast, and the final statement of second-quarter economic growth came in at 3.8%, down from 4.0% previously and below analyst expectations of 3.9%.

Friday at 12:30 GMT brings US Personal Income for August expected to show 0.4% growth, plus Personal Spending (also expected at 0.4%) and Core PCE Inflation – the Fed's key indicator – forecast at 0.1% growth.

Back in Thursday's action, crude oil rose more than 3% on worries over storms brewing in the Atlantic and the Gulf of Mexico, plus supply concerns at an Oklahoma terminal, as well as increased geopolitical tensions over Iran, Nigeria and the Burmese anti-democracy crack-down.

The US Dollar index fell to a brand new record low at 78.15 in early trade before it cut its losses after Thursday's mixed economic data. But the Greenback still ended with a loss as the Euro rose to yet another new record high.

US Treasury bonds traded on either side of unchanged in morning trade in New York. They then rose to find decent gains after another strong bond auction by the US government pushed interest rates decidedly lower by the close.

The Dow, Nasdaq, and S&P traded slightly higher as traders weighed mixed economic data and the prospect for further interest rate cuts by the Fed.

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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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