Gold News

Gold Slumps as Dollar Reaches 1-Year High

From Chris Mullen at

Gold traded almost 2% lower near in Asia and London on Wednesday before rising to see a less than $5 loss at $783.65 a little after the Wall Street opening.

But Gold then fell back off to a new low of $757.85 by a little after noon and ended near that low with a loss of 3.78%.

Silver traded as high as $11.597 and fell to as low as $10.73 before it closed with a loss of 6.79%.

The Gold Price in Euros fell to €547, platinum lost $72.50 to $1180.50, and copper rose a few cents to about $3.12 after reports of an earthquake in Northern Chile.

Gold and silver equities saw decent gains at the open before they fell to see slight losses by late morning, but they then rallied back higher for the rest of trade and ended with about 4% gains.

Oil fell despite Hurricane Ike approaching the Gulf of Mexico, an OPEC production cut, and unexpectedly large drops in US inventories as concerns over falling demand continue to drag the market lower.

US crude stockpile inventories fell 5.9 million barrels, gasoline inventories fell 6.5 million barrels, and distillates dropped 1.2 million barrels.

The US Dollar index meantime rose to a one-year high as traders continue to concentrate on falling oil prices and slowing economies in other parts of the world.

Treasuries fell as the Dow, Nasdaq, and S&P rose despite more financial worries.  Lehman’s plan to sell a majority stake in its investment management business – as well as spinning off its troubled mortgage assets – stabilized its stock after Tuesday's 45% plunge, but most other financial stocks kept falling on worries that they will have trouble raising needed capital as well.

All three indices managed slight gains despite these facts as investors built new positions in energy, materials and consumer staple stocks.

There were no major economic reports on Wednesday. Thursday at 13:30
GMT brings US Import and Export Prices for August, Initial Jobless
Claims for 9/06 expected at 440,000, and the trade Balance for July
expected at -$58.0 billion.

Just after the London close comes the US Treasury Budget for August expected at -$105.0 billion.

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.

See the full archive of Chris Mullen articles


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