Gold News

Gold Ends Weds Higher as Silver Falls, Oil Gains; US Home Sales Slump

From Chris Mullen at GoldSeek.com...

Gold Prices fell nearly $5 early Weds to as low as $754.15 by late trade in London, but the Gold Market then rose throughout most of the New York session and ended near its high of the day with a gain of 0.34%.

Silver dropped to as low as $13.38 by late trade in London and revisited that low in late morning New York trade before it rebounded in afternoon trade, but it still ended with a loss of 0.52%.

Gold in Euros rose to over €535, platinum lost $7 to $1438, palladium lost $2 to $358, and copper fell roughly 5 cents to about $3.50.

Gold and silver mining equities dropped about 2% by late morning, but they then rallied back higher in afternoon trade and ended with about 0.5% gains.

On the data front, Existing US Home Sales fell a whopping 8% in Sept. from August, much more than Wall Street's already-low expectations and the largest drop on record.

Thursday at 12:30 GMT brings Initial US Jobless Claims for last week, expected at 320,000, plus the Durable Goods Orders report for Sept., forecast to show 1.5% growth.

At 14:00 GMT comes the New Home Sales report for Sept., expected at 775,000.

The US Dollar index fell and Treasury bonds rose after Weds' Home Sales data. Traders are now pricing in a 14% chance that the Federal Reserve will cut rates by a full 50 basis points next week, rather than just the 25 basis points most expect.

Two-year note yields fell on Weds to a new 28-month low, as subprime mortgage related write downs reignited worries over the credit market as well.

Oil rose over 2% after a surprise drop in inventories and an escalation of tensions between Turkey and Iraq.  Crude inventories fell 5.3 million barrels, gasoline inventories fell 2.0 million barrels, and distillates fell 1.8 million barrels.  Heating oil rose to a new record intraday high at $2.351 a gallon.

The Dow, Nasdaq, and S&P fell markedly in morning trade after Merrill Lynch extended its writedowns related to bad bets on risky subprime mortgages and related securities.

But despite poor tech-stock earnings reports, the Nasdaq and S&P rebounded to close well off their lows, and the Dow nearly found a small gain.

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Adrian Ash is director of research at BullionVault, the physical gold and silver 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 is now a regular contributor to many leading analysis sites including Forbes and a regular guest on BBC national and international radio and television news. Adrian's views on the gold market have been sought by the Financial Times and Economist magazine in London; CNBC, Bloomberg and TheStreet.com in New York; Germany's Der Stern; Italy's Il Sole 24 Ore, and many other respected finance publications.

See the full archive of Adrian Ash articles on GoldNews.

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