Gold News

Gold Ends Weds 0.4% Higher as Silver Falls, Stocks Sink Yet Again, on Fresh Deflation Fears

From Chris Mullen at

Spot Gold and silver prices traded mostly higher in Asia and London on Wednesday before they spiked upwards early in New York to see gains of 2.69% and 3.04% respectively.

Both silver and Gold Prices then fell back off for most of the rest of trade and ended near their new session lows of $731.45 and $9.235 with a gain of 0.4% and a loss of 2.3% for the session.

Crude oil ended lower on continued demand concerns as the US inventory stockpile report showed larger builds than expected in crude and gasoline stocks.

The US Dollar index reversed an earlier loss to end higher on another round of cash liquidations and redemption. The Gold Price in Euros rose to €586, platinum lost $14 to $812.50, and copper fell over 6 cents to about $1.59.

Treasuries rose as the Dow, Nasdaq, and S&P dropped markedly yet again on more economic worries and concerns that the big three automakers will have to file for bankruptcy or take other drastic steps if they do not receive a bailout.

Gold and silver equities rose roughly 7% in the first half hour of trade, but they then fell back off for the rest of the day and ended with about 5% losses.

Trade-group the World Gold Council (WGC) said in its latest quarterly Demand Trends report that global gold demand – including jewelry, industrial and Gold Investment purchases – rose 18% in tonnage terms between June and end-Sept.

On the economic front, US consumer prices – led by food and energy – fell at their fastest pace on record in Oct., down 1% from the month before.

Excluding so-called "volatile" energy and food costs, however – the Federal Reserve's preferred measure when inflation was rising strongly – the cost of living ticked only 0.1% lower.

On an annualized basis, headline CPI growth slipped to a 12-month low of 3.7%.

The CEOs of the big three US automakers meantime testified before the political financial services committee to beg for a $25 billion bailout-bridging loan. Minutes from the Federal Reserve's Oct.29th meeting showed clear worries about deflation and the possible need to lower the Fed funds rate to 0%.

Housing starts for last month showed a sharp drop from Sept., but came in just ahead of consensus expectations.

Analyst forecasts were sharply lowered for growth and employment, however.

Thursday at 12:30 GMT brings Initial Jobless Claims for 11/15, expected at 503,000, and at 14:00 comes the Leading Economic Indicators report for October expected at -0.6% and the Philadelphia Fed survey expected at -35.0.

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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