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Gold Ends Thurs 4% Lower as Oil Sinks, Dollar Gains, Dow Reverses 380-Point Loss

From Chris Mullen at

Gold rose nearly 1% to $843.63 in Asia on Thursday, and traded slightly higher in London too, before it plummeted in early New York trade.

Gold Prices dropped as low as $784.80 by noon EST, but then rebounded to end with a loss of 4.09%.

The Dow fell as much as 380 by late morning and the Nasdaq and S&P followed suit on worries over the economy, but all three indices rose markedly in the last couple of hours of trade and ended with about 5% gains as some hoped the worst may now be over.

The US Dollar index rose after oil closed below $70 for the first time since August 2007. New data showed US crude-oil inventories building 5.6 million barrels last week, while gasoline inventories rose 7 million barrels and distillates fell 450,000 barrels.

The EIA also reported Thursday that global product demand has declined again, and the Opec oil cartel moved up their emergency meeting – aiming to agree output cuts – to next Friday, October 24th.

Silver rose 19 cents to $10.30 at the open in New York before it also plummeted, dropping as low as $9.20 by midday. It also rebounded into the close, but it still ended with a loss of 5.39%.

The Gold Price in Euros fell to €599, platinum lost $85.50 to $876.50, and copper fell another 12 cents to a 33 month low at about $2.10.

Gold and silver equities fell about 10% by late morning before they rebounded in afternoon trade, but they still ended with about 8% losses.

Treasuries rose after economic data showed that Industrial Production dropped the most since 1974 and manufacturing in the Philadelphia region shrank by the most in almost 20 years.

Consumer Price Inflation held flat in Sept., the government said, but stripping out oil prices – now down by one-half from their peak – so-called "core CPI" crept higher again. US home-builder sentiment has dropped to a record low according to a private-sector report.

Friday at 13:30 GMT brings new US Building Permits for Sept., expected at 840,000, and Housing Starts expected at 870,000. Then comes Michigan Sentiment for October, expected at 65.0.

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.

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