Gold Slumps to Two-Week Low as Oil Sinks; US Growth Slowing, Inflation Rising
From Chris Mullen at GoldSeek.com...
Gold Prices rose slightly to $901.45 by late trade in Asia on Thursday, but then fell hard throughout London and New York hours to reach a two-week low.
Crude oil lost more than 3% despite bouncing back from early lows after an astounding drop of 8.8 million barrels was reported in US oil inventory stockpiles, bringing the price back near $133.
The cost per barrel soon fell back off to end over $4 lower for the day on the view that recent high prices are finally starting to cut into demand. The large decline was clarified as reportedly due to temporary delays along the Gulf Coast.
The Dow, Nasdaq, and S&P rose on reduced recession worries and optimism over lower energy prices in the future. The Gold Market ended about 0.5% off its low of $873.00 with a loss of 2.55%.
Silver rose over 1% to $17.56 by late trade in Asia, but it also fell off markedly in London and New York and ended near its low of $16.46 with a loss of 4.64%.
The Gold Price in Euros fell to about €566, platinum lost $75 to $1989, and copper fell over 15 cents to about $3.57.
Gold and silver equities fell over 3% by early afternoon and remained near their lows into the close.
The US Dollar index rose and Treasuries fell after US economic growth was reported for the first quarter as expected at 0.9% annualized. This sent interest rates higher in the open market after the GDP deflator – a measure of inflation in prices – was revised up to 3.5% year-on-year vs. 2.6% forecast.
The yield on the 10-year note rose to its highest since December 2007.
Friday at 13:30 GMT brings US Personal Income and Spending for April, both expected at 0.2%, and PCE Core Inflation expected at 0.1%.
At 14:45 GMT comes Chicago PMI and then the Reuters-Michigan Consumer Sentiment index for May, expected to show a slight drop.
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