Gold & Silver Spike But Fall Back on Federal "Bad Debt" Repository Rumors

Gold Prices rose to $892.97 in early Asian trade before it fell back near unchanged at $852 by the open in London, but it then chopped its way higher in London and New York, exploded to a new high of $916.90 in the last hour of trade, and closed with a gain of 5.49%.

Silver traded between $12.54 and $11.69 in Asia and rose to a new high of $13.01 in London before it fell back off in morning New York trade, but it too surged back higher in the last hour of trade and closed with a gain of 9.25%.

Both metals sold off markedly in after-hours access trade, however, with gold bouncing to hold near $855 per ounce on rumors that a Treasury solution to the financial crises may be announced soon as Henry Paulson has been "shopping around" a proposal to congressional lawmakers that would create an entity to deal with the bad debt, similar to what was done in the savings and loan crisis of the 1980s, or so a congressional aide said.

The Gold Price in Euros meantime rose to about €619, platinum gained $32 to $1119.50, and copper gained a couple of cents to about $3.09.

Gold and silver equities rose over 5% at the open before they pulled back to see only about 2% gains by midmorning and then climbed back near their opening highs in early afternoon trade, but they then fell back off in late trade and ended at about unchanged on the day.

On the data front, US jobless claims rose sharply last week, while the Fed's leading indicators report showed a marked decline at -0.5% vs. 0.2% excpected.
Philadelphia Fed

Also making economic news Thursday was the Fed almost quadrupling the amount of dollars central banks can auction around the world to $247 billion in a coordinated bid to ease the crisis.

Oil briefly rose to over $100 in early trade before it fell back to about $97, but it still ended with a slight gain as the US Dollar index fell again.

The Dow, Nasdaq, and S&P rose at the open on hopes of easing financial concerns before they fell back off to see notable losses again midday, but they then rose back substantially higher in late trade following that report that the federal government is considering creation of a repository for banks' bad debt.

Talks over bans on short selling across the globe also had traders buying/covering stocks and selling bonds to reverse earlier gains in the treasury market.

There are no major economic reports due out Friday.