Gold News

Gold Ends Weds 1.2% Higher as Dollar Sinks, US Equities Slump

From Chris Mullen at GoldSeek.com...

Gold Prices extended Tuesday's climb on Wednesday, adding nearly $25 in Asia and London to hit $845.65 before it fell back off for most of New York trade.

The Gold Market still ended with a gain of 1.22% at a new 27-year closing high.

Silver added nearly a Dollar to Tuesday’s advance, hitting $16.21 in early London trade before it also fell back off in New York. Silver still ended with a gain of 0.33% at a new 27-year high of its own.

Gold Market futures rallied to close at a new record high of $833.50 per ounce on the front-month contract, now Dec. '07.

Gold Priced in Euros rose to a new lifetime high above €568, platinum lost $17 to $1456, palladium lost $3 to $372, and copper fell nearly 10 cents to about $3.32.

Gold and silver equities rose to new record highs with nearly 2% gains at the open, but they then fell off with the major indices in afternoon trade and ended with roughly 2% losses.

Wednesday's economic data from the US proved stronger than expected, with Productivity for July to Sept. growing 4.9% and Wholesale Inventories adding 0.8% for Sept. But Consumer Credit took a tumble, sliding to $3.7bn in Sept. from $15.4bn growth the month before.

Thursday at 12:30 EST brings Import and Export Prices for Oct., Initial Jobless Claims for last week, and the Trade Balance for September, expected at -$58.5 billion.

Crude oil prices fell back from a record $98 per barrel after US stockpiles were reported to have fallen less than expected last week. A markedly weak general market raised concerns over demand going forward.

The US Dollar index fell nearly 1% to yet another new record low on more comments from China that they may adjust their reserves. Traders also looked forward to today's European Central Bank and Bank of England meetings, where both banks are expected to keep interest rates unchanged despite a declining Fed funds rate in the US.

Treasuries rose as the Dow, Nasdaq, and S&P fell nearly 3% on worries over that record low Dollar, which continues to plunge on concerns over the credit market.

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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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