Gold Ends Monday 2.8% Down as Stocks Slide, Bonds Fall Ahead of $63Bn Deluge

From Chris Mullen at GoldSeek.com...

The Gold Price traded slightly lower in Asia and London on Monday, but it then plummeted for most of New York trade and ended near its low of $912.20 with a loss of 2.8% for the day.

Silver traded about 1% lower in Asia before it rose in London, seeing a gain of seven cents a little after 09:00 EST in New York, but silver then fell back off for most of the rest of trade and ended near its low of $12.879 with a loss of 3.2%.

The Gold Price in Euros fell to about €725, platinum lost $8 to $1058, and copper fell roughly 5 cents to about $1.63.

Gold Mining and silver equities fell over 3% in the first hour of trade and remained at about that level for the rest of the day.

Crude oil rose on expectations of more production cuts from the Opec oil cartel, while a naval incident between the US and China also added a geopolitical premium.

The State Department claimed that 5 Chinese vessels "harassed" an unarmed US Navy ocean surveillance ship in international waters on Sunday in the South China Sea.

The US Dollar index rose on renewed safe haven buying. The bulk of Monday's gains came versus the Yen after Japan posted its first trade deficit in 13 years.

The British Pound was also weak as the UK government took a majority stake in its biggest mortgage lender, Lloyds Banking Group Plc.

Treasuries fell on persistent worries over upcoming supply. This week alone brings auctions of $63 billion.

The Dow, Nasdaq, and S&P fell over 1% more on continued worries over the economy and the banking system.

There were no major US economic reports Monday, but "sage of Omaha" and head of Berkshire Hathaway Warren Buffett was quoted as saying the economy has "fallen off a cliff". Private-sector consultancy the Conference Board said US employment on its measure "has declined faster than at any other time in its 35-year history."

Tuesday at 15:00 GMT brings the US Wholesale Inventories report for January, expected down 1.0%.