Gold News

Gold & Silver Jump on New Flood of US Debt, Canadian Failure to "Quease"

From Chris Mullen at GoldSeek.com...

Gold and silver held in a tight range in Asia and London on Thursday, but they then exploded higher between 10:00 and 11:00 in New York and held near their late morning highs of $908.60 and $12.86 into the close.

Gold ended with a gain of 1.5% while silver closed with a gain of 3.7%.

Mildly disappointing US Existing Homes sales data looked to be one catalyst for the move, but a more likely reason was news of the government's plan to issue a massive amount of debt next week.

The Treasury Department said it will sell $101 billion in notes next week, raising doubts whether there will be enough investor demand to buy it all.

"It's the supply that's coming that is the concern and the palpable disinterest by real money to buy into what's really been range-confined weakness," said strategists at RBS Greenwich Capital.”

Another leg down in the Dollar was also an important factor, but the Gold Price in Euros also rose, up to €691 an ounce.

Trade-weighted, the US Dollar index fell markedly after the Bank of Canada "refrained from implementing Quantitative Easing measures immediately," as analysts at Action Economics put it.

The foreign-exchange market "had been gearing itself up for concrete [quantitative easing] plans from the bank, and with those put off for more than a month, the Canadian dollar has rallied sharply."

Oil climbed back near $50 per barrel, and Treasury bonds meantime closed slightly higher in the open market, while the Dow, Nasdaq, and S&P waffled near unchanged and ended with modest gains on mixed earnings reports.

Platinum gained $5.50 to $1175.50 while copper fell nearly 7 cents to about $1.99.

Gold Mining and silver equities rose over 4% by late morning before they dipped a bit in afternoon trade, but they still ended with about 3% gains.

Friday at 13:30 BST brings Durable Goods Orders for March, expected down 1.5%, followed by the New Home Sales report for March, expected at 337,000.

Chris Mullen is chief content manager of the GoldSeek family of websites, a leading source of gold news, comment and mining-stock data for private and institutional investors.

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