Gold News

Gold Hits New Closing High Even as Oil Stalls, Wall Street Bounces

From Chris Mullen at GoldSeek.com...

Gold Prices shot higher in Asia on Wednesday to find nearly $15 gains as high as $891.50 before falling back off in London and dropping as low as $873.40 by early trade in New York.

The Gold Market then rallied back for most of the rest of US trade and ended with a gain of 0.21% at a new record closing high.

Silver rose alongside as high as $16.105 – and then fell as low as $15.52 – before it also rallied into the New York close and ended with a gain of 0.26% at its highest level since 1980.

Gold Priced in Euros rose above €600 per ounce, platinum gained $3 to $1550 to a new record high, palladium lost $2 to $373, and copper remained at about $3.28.

Gold and silver mining equities traded mixed, however, and ended with less than 1% gains despite a stronger bounce in the broader Wall Street indices after Tuesday's sell-off.

The Dow, Nasdaq, and S&P rose slightly in morning trade before they fell off markedly mid-afternoon. They then rallied back higher into the close and ended near their highs with over 1% gains as recession talk raised expectations for more Fed interest rate cuts.

Overall, the action was enough for gold stocks in the HUI index to record a new all-time closing high.

There were no major economic reports today, but Goldman Sachs made headlines by forecasting a US recession in 2008. Thursday at 08:30 EST brings Initial Jobless Claims for last week, expected at 340,000.

At 10:00 comes the Wholesale Inventories report for November, expected to show 0.4% growth.

On Wednesday, US Treasury bond prices rose on fresh recession worries that sent the yield on the 10-year below 3.8% for the fist time since the first half of 2004.

Crude oil rose, however, finding decent gains after US stockpiles fell a much larger than expected 6.8 million barrels according to last week's data. But the energy market then fell back off to find a slight loss by the close on future demand concerns.

Gasoline inventories built 5.3 million barrels, distillates rose 1.5 million barrels, and refinery utilization rose 1.9% to 91.3%.

The US Dollar index rose strongly thanks to a headline surge in US mortgage applications reported by the MBA for last week, while both the Pound and Euro fell ahead of Thursday’s policy meetings at the Bank of England and European Central Bank.

Poor retail sales data on Wednesday is widely forecast to herald lower UK interest rates at midday.

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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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