Gold News

Gold Ends Monday 0.23% Lower as US Stocks & Dollar Slide Yet Again on Record Oil, Banking Rumors

From Chris Mullen at GoldSeek.com...

Gold Prices rose to $980.60 by late trade in Asia on Monday before falling as low as $960.90 by 10:00 in New York.

But the Gold Market then rallied higher into the close as the Dow, Nasdaq, and S&P fell on rumors of liquidity problems at Bear Stearns that were later denied.

Financial stocks led the way lower on worries over margin calls and counterparty risk, with the S&P closing 1.5% to the bad. Gold ended Monday with a loss of just 0.23%.

Silver rose to $20.392 by late trade in Asia before it fell as low as $19.188 by the US open. Like gold, silver also rallied back higher into the close, ending nearly 50 cents off its low with a loss of 2.3%.

The Gold Price Euros fell to about €633, platinum gained $16 to $2036, and copper fell over 12 cents to about $3.80.

Gold and silver equities fell over 3% by late morning and remained near their lows into the close despite the rebound in the metals as the major US stock indices fell over 1% again and dragged everything lower.
Wholesale US inventories reported for Jan. gave fresh evidence of a slowing economy. The Federal Reserve offered $50 billion in 28-day loans through its Term Auction Facility to ease tight liquidity in the money markets.

Tuesday at 13:30 EST brings the US Trade Balance for Jan., expected at -$59.0 billion.

Crude oil rose throughout Monday's trade and gained nearly 3% to a new all-time high just shy of $108 per barrel on rising demand out of China. The weak Dollar also continued to encourage traders to accumulate commodities, with the USD Index reversing early gains and ending lower despite comments from European Central Bank president Jean-Claude Trichet about the recent volatility in foreign exchange markets.

Strong economic data out of Japan and Germany, plus more financial worries in the US, countered the risk of monetary intervention. Treasuries rose markedly as traders are now pricing in a 100% chance of a cut of 75 basis points by the end of the Fed’s meeting next Tuesday and a further 20% chance of 100 basis points as the market continues to deal with financial problems.

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Adrian Ash

Adrian Ash, BullionVault Gold News

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

See the full archive of Adrian Ash articles on GoldNews.

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