Gold Dips 0.2% as Stocks Dump 8%, Silver Sinks 7.7% on Rising Inflation, Shrinking Retail Sales

From Chris Mullen at GoldSeek.com...

Gold Bullion traded about 1% higher in Asia and London on Wednesday, and then fell to see a $7.05 loss at the New York open.

Gold Prices then quickly rebounded to see a $17.70 gain at $855.80 by about 10:00 EST, but then fell back off for most of the rest of trade and ended with a loss of 0.2% for the session.

The prospect of the US government needing to sell more debt to try and solve the financial crisis weighed on bonds, while the Dollar rose on significant Euro weakness.

The Dow, Nasdaq, and S&P fell about 1% at the open on poor economic data and then continued to fall on worries over the credit market. All three indices closed with about 8% losses.

Silver climbed 14 cents to $11.09 in Asia and fell to $10.15 at the open in New York before it rebounded back to about $10.50 for most of the rest of the day.

Silver prices then collapsed yet again, ending near a new session low with a loss of 7.67%.

The Gold Price in Euros rose to about €619, platinum lost $62 to $962, and copper fell over 18 cents to about $2.22.

Gold and silver equities fell throughout the day along with the major indices and ended with over 10% losses.

Crude oil prices fell to a 13-month low to under $75 as the Opec oil cartel slashed its demand forecasts. US inventory stockpile data – usually released Wednesday – is delayed until Thursday after the Columbus Day holiday on Monday.

The US Dollar index rose and Treasury bonds fell despite much worse than expected Retail Sales data, down 1.2% for the month in Sept. against 0.7% expected.

Producer Prices fell 0.6%, but stripping out "volatile" fuel and food prices, the underlying trend pushed higher again with Core PPI rising a shock 0.4% from Aug. – twice as fast as analysts forecast.

Thursday at 13:30 GMT brings US Consumer Price Inflation data for Sept., expected at 0.1%, with Core CPI expected higher at 0.2%.

Initial Jobless Claims for last week are expected at 470,000, with much weaker Net Foreign Purchases of US Securities, Capacity Utilization and then Industrial Production to follow.