Gold & Silver Plummet as Stocks Soar on Citigroup News, "Uptick" Rule for Short-Sellers

From Chris Mullen at GoldSeek.com...

Gold and silver plummeted once again in New York trade on Tuesday, ending near their lows of $892.25 and $12.452 with losses of 2.2% and 3.1% respectively.

US stocks leapt, meantime, adding 6.3% to the S&P index and more than 7% to the Nasdaq,  apparently boost by Citigroup CEO Pandit claiming that the No.1 US bank – now part-owned by the state – is having its best quarter since 2007.

Law-maker Barney Frank said that the uptick rule will also be restored within a month, forcing short-sellers to wait for a move higher in their target stock before taking their position.

The Gold Price in Euros fell to €704, platinum lost $25 to $1033, and copper gained over 4 cents to about $1.67.

Gold Mining and silver equities fell over 6% by midday before they rebounded slightly in late trade, but they still ended with roughly 5% losses on the day.

Oil erased early gains and ended almost 3% lower after the US government further cut its forecast for global energy demand.

The US Dollar and Treasury bonds both fell after Fed chairman Ben Bernanke spoke to the Council on Foreign Relations about the economy and the financial system. In his Q&A session he said that he did not support suspending mark to market rules for valuing bank assets.

The FDIC's Sheila Bair told journalists she thinks the “toxic assets relief program” can help jump-start new credit and lending, boosting the economy.

The International Monetary Fund (IMF) warned of a global recession in 2009, the first since the Second World War.

Tuesday's data release showed a 0.7% drop in US wholesale inventories. Wednesday at 19:00 GMT brings February’s US Treasury Budget, expected at minus $205 billion.