Gold ends Thurs 1.5% higher; Dollar falls on Euro inflation warning

From Chris Mullen at GoldSeek.com...

Gold Prices rose steadily throughout most of trade in Asia and London on Thursday, hitting a high of $753.25 by early afternoon in New York.

The Gold Market then eased a couple of Dollars into the close, but it still ended with an impressive gain of 1.55% for the day.

Silver followed a similar pattern and rose to as high as $13.898 before it also moderated slightly into the close. It still ended with an even larger gain of 2.44%.

Gold Priced in Euros rose above €527, platinum gained $22 to $1407 to a new record high, palladium gained $5 to $377, and copper fell slightly to about $3.68.

Gold and silver mining equities rose to new all-time highs with over 3% and 4% gains by early afternoon, but they then sold off with the major indices in the last couple hours of trade and ended with only about 1% gains.

On the economic front, new data showed the US trade deficit for August shrinking slightly from July's figure, down 2.4% to $57.6 billion. The price of imported goods, however, rose faster than expected in Sept., reversing the 0.3% dip seen in August to rise 1.0% month-on-month. Initial jobless claims slipped to 308,000 for last week from 320,000 the week before.

Treasury bonds fell slightly after these economic data came in better than expected, and the Dow, Nasdaq and S&P found nice gains in the first four hours of trade after Wal-Mart and other retailers forecast or reported stronger than expected sales.

But all three indices fell back off in the last two hours of trade and ended noticeably lower after European Central Bank governing council member Axel Weber said the ECB may need to raise Euro interest rates to a level "that restricts economic growth to keep inflation under control."

The US Dollar index fell back near new all-time lows on this news, as the Fed’s bias is still perceived to be lower. The Bank of Japan earlier held Yen rates at 0.5%.

Crude oil rose throughout trade and ended with over 2% gains near the all-time high of $83.90 after some bullish inventory data. US oil stockpiles surprisingly fell 1.7 million barrels, gasoline inventories built 1.7 million barrels, distillates fell 600,000 barrels, and refinery utilization rose 0.3% to 87.8%.

Friday at 12:30 GMT brings Producer Price Inflation data – expected to show a 0.5% rise – plus Retail Sales growth, expected at 0.2% month-on-month, both for Sept.

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