Gold & Silver Slide as Stocks Plunge on "Troubled Asset" U-Turn
From Chris Mullen at GoldSeek.com...
Gold and silver rose roughly 1% in Asia on Wednesday before falling in London and New York to drop as low as $713.30 and $9.328 respectively per ounce by about 11:00 EST.
Despite a late rally, Gold Prices and silver ended with losses of 2.1% and 3.1% for the session. Both metals then fell to new lows in after hours access trade.
The Gold Price in Euros fell to about €573, platinum gained $3.50 to $819.50, and copper rose slightly to about $1.65.
Gold and silver equities fell throughout trade and ended with over 10% losses.
On the economic front, the Troubled Asset Relief Program (TARP) as we previously knew it is no more after Treasury secretary Hank Paulson announced a dramatic change to instead use the money approved by Congress to buy up illiquid investment bonds for shoring up banking stocks directly.
Bailouts now seem to be open to non-financial companies like GM – currently trading at a 60-year low. There is no telling whether or not the originally proposed $700 billion will be even close to enough to bail out seemingly anyone and everyone who asks for it, except for the tax payer it seems who of course gets to fund it all.
Thursday at 08:30 EST brings Initial Jobless Claims for 11/08 expected at 479,000 and the Trade Balance for September expected at -$57.0 billion. At 2PM is the Treasury Budget for October expected at -$134.0 billion.
Oil fell to its lowest price since January 2007 on more demand worries while the U.S. dollar index rose slightly as traders continue to raise cash. Many were also starting to prepare for this weekend’s G20 meeting.
Treasuries rose on safe haven buying while an auction of 4-week bills drew a yield of just 0.07%.
The Dow, Nasdaq, and S&P fell markedly yet again – down almost 5% – on uncertainty over the TARP change and on more bad news from several companies.