Gold News

Gold Price Ends Tues at New Record High as US Inflation Soars, Real Estate Sinks, European Gold Sales Slow

From Chris Mullen at

fell to $926.30 by late trade in Asia on Tuesday, but it then rallied back higher throughout London dealing and rose as high as $948.00 in New York.

The Gold Market then closed with a gain of 0.85% for the session at a new record closing high.

The US Dollar index fell markedly to a new record low as the Euro rose on a strong reading from a German business confidence survey. Stagflationary fears then increased in the United States after Producer Price inflation came in at 7.4% year over year, the highest rate since 1981.

Yet vice-chairman Kohn of the Federal Reserve said slower growth is more of a concern than inflation. The S&P/Case-Shiller US National Home Price Index showed home prices fell at a record rate of 8.9% in 2007, and Consumer Confidence came in at a 5-year low.

Treasuries found only minor gains despite those poor economic data as the Dow, Nasdaq, and S&P rose nearly 1% on IBM’s plan to buy back stock.

Silver fell to $17.91 before it rose to a new 27 year intraday high at $18.73 and closed with a remarkable gain of 3.8%.

The Gold Price in Euros rose near €634 on news that European central banks are selling their gold only slowly in 2008 so far, on track to end the Gold Agreement year in Sept. well below the 500-tonne quota.

Platinum lost $5 to $2130, and copper gained roughly 4 cents to about $3.78.

Gold and silver equities rose roughly 2% by early afternoon, remained near their highs into the close, and ended about 1-2% away from setting new record closing highs last set on Jan. 14th 2008.

Wednesday at 13:30 GMT brings the US Durable Goods Orders report for Jan. – expected at minus 4.0% – and at 15:00 GMT comes the New Home Sales report for Jan., expected to show a 0.7% fall month-on-month.

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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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