Gold News

Gold Slides, Stocks Jump as "Mark-to-Market" Abandoned, G20 Vows New $1.1Trn Injection

From Chris Mullen at

Gold saw slight gains in Asia on Thursday before it tumbled in London and early New York trade, dropping as low as $894.50 a little before noon EST.

The Gold Price then bounced in the last few hours of US trade, ending 1.4% off that low with a loss of 1.9% for the day, after the G20 summit in London failed to propose Extra IMF Gold Sales to fund its $1.1 trillion cash injection into world markets.

The Gold Price in Euros fell to bounce off €666 an ounce.

Silver saw over 1% gains in Asia before it also fell in London and early New York trade, dropping as low as $12.57 by 10:00 EST, but it then rallied back higher in the last few hours of trade and ended with a gain of 0.6%.

Platinum gained $18.50 to $1,152, and copper gained four cents to about $1.89.

Gold Mining and silver equities fell over 5% by late morning before they rebounded a bit in afternoon trade, but they still ended with over 4% losses.

Oil climbed back above $52 on hopes that measures taken at the G20 will help stimulate demand.

The US Dollar index meantime plummeted while the Euro soared on the European Central Bank's decision to cut its interest rates by only 0.25% rather than 0.50% as forecast.

Treasuries fell and the Dow, Nasdaq, and S&P ended 3% higher on news that companies no longer need to fully account their activities.

The Financial Accounting Standards Board (FASB) announced changes to "mark-to-market" accounting, allowing assets to be valued at what they would fetch in "an orderly sale" – as opposed to a forced or distressed sale at the current prevailing price in the market.

The new guidelines also allow banks to avoid reporting full losses on some securities, ignoring any drop in value that can be attributed to factors such as changing interest rates and which won't in the end be counted as net income or loss.

On the data front, US Factory Orders showed a greater-than-expected bounce from Jan's 3.5% drop to show 1.8% growth in Feb.

Initial Jobless claims for last week were also ahead of expectations, however.

Friday at 13:30 GMT brings March's US jobs data, with Non-Farm Payrolls expected down 658,000 and the Unemployment Rate expected up at 8.5%.

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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