Gold News

Gold Ends the Week 1.4% Higher as Oil Falls & Dollar Slips Ahead of Fed's Interest-Rate Decision

From Chris Mullen at GoldSeek.com...

Gold Prices traded mostly slightly higher in Asia on Fridsay and then mostly lower in London before spiking up to $805.15 in early New York trade.

The Gold Market then fell back off in the next hour as low as $791.05 ahead of a bounce higher into the close that left it with a loss of 0.86% for the day but a gain of 1.4% for the week.

Silver followed a similar pattern and spiked to $14.53 before it plummeted to $14.22 in the first hour of US trade, ending 12 cents off that low with a loss of 0.69%.

Gold Priced in Euros fell to about €542, platinum lost $7 to $1455, palladium remained unchanged at $346, and copper rose over 7 cents to about $3.07.

Gold and silver mining equities fell nearly 2% in the first two hours of trade, but they then slowly climbed back higher for the rest of trade and ended with minimal losses.

On the economic front – and driving that afternoon dip in Gold Prices, non-farm US payrolls for Nov. came in at 94,000, ahead of expectations, but the BLS Net Birth/Death adjustment added 51,000 jobs on a statistical basis only.

Crude oil fell about $2 per barrel Friday on doubts that current and future demand levels can support current prices as reports also surfaced of expanding exploration for new deposits in the future.

The US Dollar index rose in early trade and Treasuries fell after the better than expected jobs report made it more likely the Fed will cut interest rates by just 25 basis points at their meeting next week, rather than the 0.5% that some are hoping for.

The Dollar did end lower on the day, however, as losses against the Euro overtook gains versus the Japanese Yen.

The Dow, Nasdaq, and S&P remained mixed and near unchanged throughout the day as traders debated about what the fed will do next Tuesday.

"President Bush’s actions to secure the future home of many simple folks is both noble and necessary and a comfort to them," says Julian D.W. Phillips of GoldForecaster.com, "but it remains to be seen if it leads to banks feeling comfortable with each other again.

"Meanwhile the Gold Price is waiting to see and consolidating. It looks like it is moving to a point where it is going to be dramatic one way or the other. Next week may tell us which way, as will the US Dollar."

Next week’s economic highlights include Pending US Home Sales on Monday, Wholesale Inventories and a FOMC policy statement on Tuesday, Export and Import Prices, the Trade Balance, and the Treasury Budget on Wednesday, Retail Sales, PPI, Initial Jobless Claims, and Business Inventories on Thursday, and CPI, Industrial Production, and Capacity Utilization on Friday.

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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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