Gold News

Gold Ends Thurs 1.4% Lower; Dollar Sinks as US Home Foreclosures Soar, Wealth Falls, Stocks Hit Crucial Lows

From Chris Mullen at

Gold Prices rose to re-touch the week's new all-time high early Thursday, but then fell in choppy trade for the rest of the day in London and New York to reach $965.75 per ounce.

Bouncing above the low hit Wednesday, the Gold Market then rebounded almost $10 in the last hour and a half of US trade to close with a loss of 1.36%.

Oil rose to a new record high at $105.97 before it fell to see slight losses by early afternoon. It then rallied back higher into the close and ended with a decent gain at a new record closing high.

The US Dollar index fell to another new record low as the European Central Bank held rates unchanged and did not hint towards future interest rate cuts despite the Euro’s recent rally.

ECB President Trichet did not mention to surging exchange rate as some had speculated he would. The Bank of England also held rates unchanged.

Treasury bonds rose as the Dow, Nasdaq, and S&P fell roughly 2% on continuing credit worries and poor housing data. The Nasdaq and Russell 2000 fell to new 52-week lows and the Dow and S&P fell to their January lows in important technical developments.

U.S. mortgage foreclosures rose to an all-time high at the end of 2007 – and household wealth fell for the first time in five years – according to new data out Thursday.

First the Mortgage Bankers Association said borrowers with adjustable-rate loans walked away from their homes before their payments increased. New foreclosures jumped to 0.83% of all residential US mortgages in the fourth quarter, up from 0.54% a year earlier. Late payments reached a 23-year high.

Then figures from the Federal Reserve showed the portion of home values owned outright by US households fell to a post-WWII low of 47.9%, while total household wealth fell for the first time since the end of the DotCom Crash.

Back in Thursday's precious metals market, silver climbed to a new 27-year intraday high of $21.205 by late trade in Asia before it fell to as low as $19.837 by early afternoon in New York. It also rebounded in the last 90 minutes of trade and ended about 30 cents off its low with a loss of 2.5%.

The Gold Price in Euros fell to about €635, platinum lost $85 to $2170, and copper fell over 7 cents to about $3.91.

Gold and silver equities fell over 1% by early afternoon, but they then rallied back higher into the close and ended mixed and near unchanged despite the fact that the major indices dropped to new lows in late trade.

Friday at 13:30 GMT brings February’s US jobs data, with non-farm payrolls expected to grow by 25,000 and the Unemployment Rate expected at 5.0%. At 20:00 GMT comes US Consumer Credit for January, forecast at $7.0 billion.

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Adrian Ash

Adrian Ash, BullionVault Gold News

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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