Gold Whipped by Dollar, Zero Rates as US Moves to Release Next $350bn of Bail-Out

From Chris Mullen at GoldSeek.com...

The Gold Price dropped almost $30 an ounce early Friday to trade as low as $829.30 a little before the New York opening.

Gold Prices then rebounded but still ended with a loss of 2.7% for the session.

For the week, in Dollars, Spot Gold closed 2.0% higher as the US currency sank on the forex market. The Gold Price in Euros, in contrast, slipped 2% to €602.50.

Silver fell all the way to $10.53 on Friday AM before it also rebounded in New York, but it still ended with a loss of 2.7% for the day.

For the week, silver added 6%. Platinum lost $12 to $844.50, and copper rose a few cents to about $1.31.

Gold and silver equities pretty much ignored the nearly 3% losses in the metals and held on either side of unchanged for most of the day, but they then surged higher in late trade and the XAU and GDM ended with nearly 2% gains while the HUI ended over 1% lower on the day.

For the week, the major Gold Mining indices rose some 4%.

In the energy market, the January crude oil contract, which expired Friday, fell to $36.22 while the February contract rose to $42.36 per barrel as traders rolled over their contracts into the new front month and speculated that the bailout of the automakers will help spur demand.

The US Dollar index soared higher after this week's sharp losses after the Bank of Japan cut its interest rates in another sign that the rest of the world is joining the Fed in the race to near-zero interest rates.

Treasuries fell as traders took profits from the recent remarkable run in bonds. lately.

The Dow, Nasdaq, and S&P rose nicely at the open on word that the automakers finally got their bailout, but all three indices fell back near unchanged by late morning and ended mixed on apprehension over the effectiveness of recent bailouts and other measures taken to help the economy.

There were no major economic reports Friday, but former Goldman Sachs CEO and current US Treasury secretary Henry Paulson said that Congress will need to release the second half of its $700 billion rescue fund because the first $350 billion has now been committed.

Economic highlights in the short Christmas week will include US economic growth (GDP), the Chain Deflator, Existing Home Sales, Michigan Sentiment, and New Home Sales on Tuesday, and Durable Goods Orders, Initial Jobless Claims, and Personal Income and Spending on Wednesday.