From Chris Mullen at GoldSeek...
Spot Gold Prices traded slightly lower in Asia and steadily fell in London on Wednesday before rocketing over 1% off its low and trading just under unchanged for the rest of trade.
Edging up at the US close the Gold Market ended with a gain of 0.01% for the day. Silver dropped all the way to $12.30 before it soared about 3% off its low, but it also fell back off from its mid-session rebound and ended with a notable loss of 1.34%.
The Euro Price of Gold rose over €496, platinum lost $6 to $1,261, palladium lost $4 to $346, and copper fell slightly to about $3.40.
Along with the rest of the stock market, gold and silver equities steadily fell throughout most of trade, ending with sharply underperforming losses of over 4% on average.
In the economy, the US consumer price index showed a reading of 0.1% for July, just as expected, while the Core CPI – excluding food and fuel – came in as forecast at 0.2% for the month. Net foreign purchases of US securities for June nearly matched May's surprise total at $126 billion. Industrial production for July came in with 0.3% growth, down from June's 0.5% reading.
Thursday brings Initial Jobless Claims for the week-ending Aug. 11, plus the must-awaited Housing Starts for July – expected at 1,405,000 – and Building Permits expected at 1,400,000.
In the broader markets crude oil rose as a tropical depression in the Gulf of Mexico was upgraded to tropical Storm Erin. Landfall is expected along the Texas coast Thursday, but tropical storm Dean is perhaps of greater concern as it is expected to become a “major hurricane” by Monday and is headed from the Atlantic into the Gulf of Mexico. US crude inventories fell 5.2 million barrels on the latest data; gasoline inventories fell 1.1 million barrels; distillates built 200,000 barrels, and refinery utilization rose 0.5% to 91.8%.
Short-dated Treasuries and the US Dollar index continued their recent rises despite renewed Dollar losses versus the Japanese Yen. Investors and traders seem to be selling almost everything and moving into cash and bonds due to the current credit-market concerns.
The Dow, Nasdaq, and S&P traded mostly higher for much of the day as financials rebounded from recent losses on apparent short covering. The Federal Reserve added another $7 billion in liquidity, but all three indices fell markedly in the last two hours of trade and ended over 1% lower after rumors surfaced that Countrywide may need to file for bankruptcy due to problems with asset-backed commercial paper.
That certainly enhanced credit concerns for the entire market and brought the financials right back down to see notable losses along with most of the market. The Dow ended below the psychological barrier of 13,000 for the first time since April. The broader S&P index of US stocks erased the last of its gains for 2007 to date. Gold remains nearly 4% higher from Jan.
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