From Chris Mullen at GoldSeek.com...
Gold Prices fell slightly to $877 per ounce in Asia on Thursday before rising to find nearly 1% gains by early morning in New York.
But the Gold Market then fell back off for most of the rest of trade and ended with a minor loss of 0.11% for the day as the Dow, Nasdaq, and S&P fell dramatically, led lower by a near $10bn loss for the fourth quarter reported by Merrill Lynch – sparked by the collapse in its subprime mortgage investments.
Bearish comments from the head of the US central bank, plus the Philadelphia Fed survey – which came in much worse than expected – then helped sink all three major indices further, pushing them to end with roughly 2% losses. US Treasury bonds, already yielding zero after consumer-price inflation, closed with nice gains.
Silver fell to $15.73 and rose to $16.07 before it also fell back off for most of the rest of trade, but it still ended with a nice gain of 0.76%.
Gold Priced in Euros fell to about €599, platinum lost $1 to $1558, palladium lost $3 to $368, and copper gained a couple of cents to about $3.19.
Gold and silver mining equities gained over 2% in the first half hour of trade, but they were then dragged down along with the major indices for most of the rest of the day and ended with roughly 2% losses.
Fed chairman Ben Bernanke gave his blessing for a US fiscal stimulus package while forecasting below-trend economic growth in his testimony to the House Budget Committee on Capitol Hill.
President Bush is set to reveal the details of the stimulus package sometime Friday morning (US time).
Friday at 10:00 EST also brings Leading Economic Indicators for Dec., expected to read -0.1%, plus Michigan Sentiment for January.
Crude oil slipped back from an early rally, ending the US session near $90 on worries about the slowing economy and its impact on falling demand.
The US Dollar index fell after it was clarified that Wednesday’s ECB comments were misconstrued and were not intended to imply the European Central Bank may soon start to cut interest rates.