Gold News

Gold Rises as Dollar Slips, Wall Street Jumps 10% Ahead of 66-Year Low in US Fed Interest Rates

From Chris Mullen at

Spot Gold fell over $10 and then rose over $12 from its Asian start on Tuesday, falling back off in London and New York trade before rallying to end with a loss of 0.23% for the session.

Silver rose 14 cents to $9.30 by late trade in Asia before it briefly dropped to as low as $8.41 in London, but it also rallied back higher into the close and ended more than 4% off that low with a loss of 4.1% for the day.

Both Gold Bullion and silver more than erased the day's losses in after-hours access trade.

Oil rose in early trade on talk of another OPEC production cut, but it fell back off by the close as MasterCard reported another drop in demand.

The US Dollar index turned early losses into gains by midday on Wall Street as the Japanese Yen weakened on talk that the Bank of Japan may cut its interest rates – already set at just 0.5%.

But the Dollar still ended lower as market participants appeared to be putting cash to work by buying stocks ahead of tomorrow's Fed decision, widely expected to bring another 0.50% cut to Dollar interest rates.

Treasuries fell as the Dow, Nasdaq, and S&P followed other world markets noticeably higher at the open. After dipping on a record-low reported in US consumer confidence, the major indices rose again in the last two hours of trade to end with about 10% gains.

The Gold Price in Euros fell 3.1% from an early 8-session high above €600 an ounce as the single currency rallied 4¢ from Monday's overnight low of $1.2350. The Gold Price in Sterling also slipped, losing half of the week's gains so far at £467, as the Pound jumped to $1.60.

Platinum gained $18.50 to $793, and copper gained another 5 cents to about $1.84.

Gold and silver equities rose over 7% at the open before they fell back off near unchanged by midmorning, but they then rallied back higher for the rest of the day and ended with about 13% gains.

On the economic data front, US home prices on the Case-Shiller index saw fresh record losses of nearly 17% for the year to Sept. US consumer confidence meantime sank to a new record low of 38 on the Conference Board's index, down from 59.8 last month.

Wednesday at 12:30 GMT brings the Durable Goods Orders report for September – expected at -1.0% – and then comes the Federal Reserve's policy statement, widely forecast to announce a further 50-basis point reduction in US interest rates to just 0.75%, the lowest level since 1942.

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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