Gold News

Gold Rebounds to $885 as Fed "TALF" Injection Fails, Stocks Tumble

From Chris Mullen at GoldSeek.com...

Gold Prices rose in Asia on Tuesday and traded roughly 1% higher in London before falling back to see a gain of just $1.25 at $872.70 shortly after the open in New York.

But the Gold Price then climbed back higher for most of the rest of trade and ended near its new session high of $884.80 with a gain of 1.2%.

The Gold Price in Euros rose to about €665, unwinding all of Monday's sharp losses.

Silver also traded nicely higher in Asia and London before it fell to see a loss of $0.102 at as low as $12.03 near the open in New York, but it too rose for most of the rest of trade and ended near its high of $12.35 with a gain of 0.9%.

Platinum gained $18.50 to $1161, while copper gained over 3 cents to about $1.99 as a drop in inventories supported the market and brought it back to within one cent of last Friday's five-month high.

Gold Mining and silver equities rose about 3% at the open before they fell back off as the day wore on, but the miners still ended with slight gains on the day.

Oil fell back below $50 on continued worries over the economy and falling demand. The US Dollar index rose as investors sold so-called risky assets in order to raise cash.

Treasuries rose slightly as the Dow, Nasdaq, and S&P fell on worries over a likely GM filing for bankruptcy and also on concern over the success of the New York Federal Reserve's latest injection of cash into consumer lending through the Term Auction Lending Facility (TALF).

All three indices dropped over 2% as the results of that auction were released, showing of the $8.2 billion of TALF-eligible deals on offer – including credit-card and auto loans – only $2.6 billion were sold.

US mortgage delinquencies showed another large rise in March, according to Equifax, taking the late-payer's rate to 7% of all mortgages and 39% of subprime loans were 30 days late or more.

Credit-rating agency Moody's said 35 corporations defaulted on their debt in March, the greatest number since the 1930s Depression.

New consumer credit showed a surprise contraction, shrinking $7.5 billion for Feb. against Jan.'s $8.1bn growth and analysts forecasts of a slight $1.5bn drop.

Wednesday at 15:00 GMT brings US Wholesale Inventories for Feb., expected at down 0.6%.

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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