Gold News

Gold & Silver End Weds 10% Higher as "Last Two" on Wall Street Come Under Attack

From Chris Mullen at

Gold and silver traded just slightly higher in Asia and London before they exploded higher at the start of New York trade and ended at their session highs with gains of 8.87% and 10.45% respectively.

Gold tallied its biggest one-day dollar gain in history and silver notched its biggest percentage gain since 1995. Both metals continued to gain in after hours access.

The Gold Price in Euros shot above €600 an ounce, platinum gained $28.50 to $1087.50, and copper fell another 4 cents to about $3.07.

Gold and silver equities rose throughout most of trade and the XAU ended with an over 8% gain while the HUI and GDM gained more than 11%.

Crude oil rose as the US Dollar fell, and traders rushed into almost all commodities. Inventory reports showed large draw-downs after Hurricane Ike disrupted production last week. Oil inventories fell 6.3 million barrels, gasoline inventories fell 3.3 million barrels, distillates fell 900,000 barrels, and refinery utilization fell 0.9% to 77.4%.

The US Dollar index fell, Treasury bonds rose, and the Dow, Nasdaq, and S&P fell markedly again on more financial worries as the Federal Reserve was forced to bailout AIG after previously being hesitant to do so.

AIG received a $85 billion loan from the Fed as it was determined that AIG could not be allowed to fail due to counterparty risk and the implications of the would be forced unraveling of AIG’s derivatives that would spread throughout the financial system and likely bankrupt many others as well.

Barclay’s also announced a $1.75 billion deal to buy parts of Lehman Brothers in an effort to resolve that situation, but it is obvious that many more serious problems remain and stocks dropped over 4% on worries over the next shoes to drop.

Morgan Stanley and Goldman Sachs are now the only two major financial firms left, and they were both down over 30% at one point today on worries over credit default swaps and the success of their overall business models as well.

Chris Mullen is chief content manager of the GoldSeek family of websites, a leading source of gold news, comment and mining-stock data for private and institutional investors.

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