Gold News

Gold Ends Thurs at New Record Closing High; Hits New All-Time Record vs. Euro

From Chris Mullen at GoldSeek.com...

Gold Prices traded near $890 in Asia on Thursday before beginning to add to their post-Fed rate-cut gains in London.

The Gold Market rose as high as $910.30 by the US open, and still ended with a 2.51% gain despite a late dip to end at a new record closing high.

Silver remained near $16 in Asia and rose to as high as $16.44 by the Wall Street start before it also fell back off slightly into the close. It ended with a gain of 2.85%, just 4 cents away from its 27-year closing high set on January 14th.

The Gold Price in Euros rose to a new record high of €615 per ounce, platinum gained $56 or 3.61% to $1606 to a new record high, palladium gained $6 to $370, and copper rose roughly 8 cents to about $3.20.

Gold and silver equities rose over 4% in early trade and climbed even further in afternoon trade to close with about 5% gains – roughly 5% away from new all-time highs.

On the economic front, sales of existing US homes in Dec. came in way below expectations, pointing to slower growth even as initial jobless claims for last week were reported below forecasts.
 
Also making economic news on Thursday was a tentative deal reached on the details of the roughly $140 billion US economic stimulus package. It includes tax rebates for families and incentives for business investment.

Of note is an increase in the "conforming loan limit" – which means the two US government mortgage agencies, Fannie Mae and Freddie Mac, can now finance larger home loans, which in turn will lower mortgage rates on loans of up to $730,000.

There are no major economic reports due out Friday.

In the broader markets, crude oil rose after Thursday's US inventory reports, and it gained further on details of the US economic stimulus plan.

US oil stockpiles rose 2.3 million barrels last month, the new data said, while gasoline inventories rose 5.0 million barrels, distillates fell 1.3 million barrels, and natural gas stocks fell 155 billion cubic feet.

The US Dollar index fell markedly and the Euro rose strongly after comments from European Central Bank council member Axel Weber, who stated that the ECB will not follow the Fed in cutting interest rates.

Weber noted that the Fed’s recent 75 basis point cut to 3.5% "had not shifted the ECB focus on Eurozone inflation." Strong German Business Confidence data and more poor US housing data also helped the Euro outperform the Dollar.

Treasury bonds fell substantially as equities rallied and expectations changed closer to a Fed rate cut of 50 basis points next week, rather than yesterday’s outlook for a cut of 75 basis points.

The Dow, Nasdaq, and S&P traded mostly modestly higher as the markets remained relatively calm in light volume compared to earlier in the week.

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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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