Gold News

Gold ends Weds 0.35% higher; confidence returns to stock market

From Chris Mullen at GoldSeek.com...

Spot Gold Prices dipped slightly in Asia on Wednesday before finding small gains in London and further gains in New York, closing over $660 per ounce, up by 0.35%.

Silver topped $11.80 before it also pared its gains in the last couple hours of trade, but it still ended with a gain of 1.22%.

The Euro Price of Gold remained at about €487, platinum lost $6 to $1,238, palladium gained $1 to $318, and copper rose over 8 cents to about $3.29.

Gold and silver equities rose over 2% at the open and remained near their highs into the close.

There were no major economic data, but a US report showed a drop in mortgage applications compared to last week. Oil rose in early trade as it looked like a now weak Hurricane Dean may turn into the Gulf of Mexico, but prices then fell and closed lower after crude inventories built rather than an expected drop.

The US Dollar index fell despite a large drop in the Yen, as the euro rallied on ECB comments that there was no change in their stance on monetary policy, leading traders to believe that Eurozone rates will continue to rise despite recent credit problems.

US Treasury bonds fell as calls for an immediate Fed rate-cut faded and four large US banks each borrowed $500 million from the Fed's recently lowered discount rate of 5.75%. Still higher than the Fed funds rate of 5.25%, these discount-window loans were seen as largely symbolic. The banks said they would pass the extra finance onto their clients.

In the stock market, the Dow, Nasdaq, and S&P rose as relative calm reigned for a third day. Confidence returned to stocks on takeover news and rumors.

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Adrian Ash is director of research at BullionVault, the physical gold and silver 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 is now a regular contributor to many leading analysis sites including Forbes and a regular guest on BBC national and international radio and television news. Adrian's views on the gold market have been sought by the Financial Times and Economist magazine in London; CNBC, Bloomberg and TheStreet.com in New York; Germany's Der Stern; Italy's Il Sole 24 Ore, and many other respected finance publications.

See the full archive of Adrian Ash articles on GoldNews.

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