Gold News

Gold Surges to New Highs After Bernanke Promises More Cheap Money Ahead

From Chris Mullen at

Gold Prices fell as low as $866 by late morning trade in London on Thursday, but they then rallied strongly throughout most of trade in New York and climbed to as high as $895.45 per ounce.

The Gold Market came back off a bit in the last hour of US trade but still ended at a new record closing high with a gain of 1.32%.

Silver dropped to $15.312 before it also rose markedly in New York and ended near its high of $16.24 with a gain of 2.74% at a new 27 year high.

Gold Priced in Euros rose above €601, platinum gained $2 to $1552 to a new record high, palladium remained unchanged at $373, and copper fell slightly to about $3.27.

Gold and silver equities fell over 1% at the US open, while The Dow, Nasdaq, and S&P fell in morning trade on poor retail sales and credit worries before all three indices took off to the upside in afternoon trade after a speech from Ben Bernanke of the Fedeal Reserve.

The Wall Street Journal then reported that Bank of America is close to buying Countrywide, calming credit market worries and resulting in the indices climbing new session highs by the close.

Mining stocks also then rose for most of the rest of trade and ended with about 2% gains at or near new all-time highs.

Bernanke spoke this afternoon and showed that he recognizes the current market turmoil and is "ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks." Expectations for a cut of 50 basis points at the Fed’s next meeting on January 30th are now nearly 100%.

Friday at 08:30 EST brings US Import and Export Prices for December and the Trade Balance for November expected at -$59.5 billion. At 14:00 is the Treasury Budget for December, expected at $52.0 billion.

Crude oil fell about 2% on worries that a slowing economy will cut into demand, while the US Dollar index fell after the ECB and Bank of England both held their rates steady, contrasting with Bernanke’s comments.

Treasuries were mixed as the yield curve rose to its steepest in over three years when 2-year yields dropped and 10-year yields rose.

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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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