Gold Slips Ahead of European Rate Decisions; Bernanke Denies "70s Style" Inflation Spiral
From Chris Mullen at GoldSeek.com...
Gold Prices slipped more than $5 by late trade in Asia on Wednesday before rising and then falling again in New York to end with a 0.18% loss.
The US Dollar index rose slightly and Treasury bonds fell as interest rates rose on better than expected economic reports. But bond and currency markets were relatively quiet ahead of Thursday's European Central Bank and Bank of England meetings that are expected to leave interest rates unchanged at 4.0% and 5.0% respectively.
Ben Bernanke spoke at Harvard late in the day, saying once again that inflation is significantly higher than the Fed wants. But he also said that the Fed sees little indication today’s situation is like the "1970s-style wage-price spiral, in which wages and prices chased each other ever upward."
Silver rose to find 0.3% gains. Gold and silver equities fell almost 2%.
The Gold Price in Euros fell to about €570, platinum lost $0.50 to $1991.50, and copper fell over 3 cents to about $3.55.
The Dow, Nasdaq, and S&P rose modestly for most of trade on decent economic data and lower oil prices, but the Dow and S&P then turned lower in the last two hours of trade after Moody’s raised more credit market worries when it placed bond insurers Ambac and MBIA on review for possible downgrades.
Crude oil fell $2 despite another large and unexpected drop in crude inventories as the US Energy Department said gasoline demand dropped sharply last week.
Crude inventories fell 4.8 million barrels, gasoline inventories built 2.9 million barrels, distillate inventories built 2.3 million barrels, and refinery utilization rose 1.8% to 89.7%.
Thursday at 13:30 GMT brings Initial US Jobless Claims for last week, expected at 372,000, but most traders are already looking ahead to Friday’s Nonfarm Payrolls report.
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