Gold News

Gold plummets in New York on strong US data

from Chris Mullen at GoldSeek...

Gold added a couple of Dollars to its July 4th gains in London trade on Thursday, before plummeting over $10 in early New York trade to as low as $645.20 by 10:30 EST.

The spot gold market then rebounded about 0.5% off its low in the last few hours of New York trade, ending with loss of 0.74%.

Silver dropped to as low as $12.36 before it also rebounded into the close, but it still ended with a loss of 1.03%.

The Euro price of gold fell to about €477, platinum gained $8 to $1,302, palladium lost $2 to $365, and copper rose roughly 6 cents to about $3.62.

Gold and silver equities rose about 1% at the open before they fell back near unchanged by midmorning as gold and silver fell, but they then rallied back higher throughout the afternoon and ended with over 1% gains.

In the economy, the ISM Service index for June came in above forecast and higher than May's figure, boosting the Dollar in the currency markets even though initial jobless claims for last week were slightly up. Also making economic news was the ADP’s private jobs report showing a better than expected addition of 150,000 jobs in June, but most analysts are waiting for today's US government jobs data at 08:30 EST.

Non-farm Payrolls are expected at 125,000, the Unemployment Rate is expected at 4.5%, Hourly Earnings are expected at 0.3%, and the Average Workweek is expected at 33.9.

In the markets, oil started Thursday higher on news of attacks and kidnappings in Nigeria before it fell off rather dramatically after US inventories came in much higher than expected. Oil then rose back higher in afternoon trade and closed with a decent gain on refinery problems and worries of escalating violence in Nigeria and other areas of the world.

Crude inventories built 3.1 million barrels, gasoline inventories built 1.8 million barrels, distillates built 1.2 million barrels, and refinery utilization rose 0.6% to 90.0%.

The US Dollar index rose and Treasury bonds fell after that stronger than expected ADP jobs and ISM Services data pushed interest rates higher. The Bank of England raised interest rates to 5.75% and the European Central Bank held rates at 4.0%, but neither event had much impact on the currency markets as the policy moves were announced as expected.

The Dow, Nasdaq, and S&P remained near unchanged and ended mixed as worries over rising bond yields battled more buyout 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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