Gold Leaps 3.8% on Thurs as Wall Street Sinks; GM Hits Half-Century Low

From Chris Mullen at GoldSeek.com...

Gold retained its $5 post-Fed gains in Asia on Thursday, and added another $5 or so in London before spiking even higher as New York opened.

Oil rose to a new record high of $140.39 as the OPEC president says he sees oil hitting $170 thanks in large part to a weakening Dollar.

The Gold Price then rose to find a near-$35 gain for the day at $914.50 by late morning.

Oil supply concerns also reignited after Libya said it will consider cutting output in response to US actions against producer countries, meaning no doubt Iran.

The US Dollar index fell further and Treasury bonds rose, despite the clear signs that inflation is a major problem. Still the Fed is not going to do anything about it anytime soon.

The Dow, Nasdaq, and S&P fell approximately 3% and ended right at their lows of the session on several poor earnings reports, rising oil prices, and analysts downgrades.

General Motors fell to a 53-year low as Goldman Sachs cut them to a "sell" that brought many of the other automakers down as well.

Goldman Sachs also cut Citigroup's and Merrill Lynch's second-quarter estimates which increased worries about the financial sector. All three indices fell throughout the day and broke through important support levels.

The Gold Market ended with a gain of 3.73%.

Silver climbed roughly 2% to about $16.90 in Asia and London and then spiked to as high as $17.43 in early New York trade before it fell back off for most of the rest of trade, but it still ended with a gain of 3.81%.

The Gold Price in Euros rose to above €580, platinum gained $51 to $2059.50, and copper gained roughly 4 cents to about $3.82.

Gold miners and silver equities rose about 4% in the first hour of trade before they pulled back to trade about 3% higher by late morning, but they then rallied to new session highs in afternoon trade and ended with about 5% gains despite roughly 3% losses in the major indices.

US GDP for the first quarter was confirmed at an anemic 1.0% growth, with the Chain Deflator measure of price inflation rising to 2.7%. Initial jobless claims for last week leapt to 384,000.

Friday at 14:30 GMT brings Personal US Income for May, expected up 0.4%, Personal Spending expected up 0.7%, and PCE Core Inflation expected at 0.2%.

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