Gold Surges to New Highs After Bernanke Promises More Cheap Money Ahead
From Chris Mullen at GoldSeek.com...
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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