Gold Drops 3% Tuesday as "Dollar Jawboning" Defies Worst Trade Deficit in 13 Months
From Chris Mullen at GoldSeek.com...
Gold Prices sank throughout world trade on Tuesday, ending about 0.5% off the session's low of $863.95 with a loss of 2.99%.
Crude oil eventually fell over 2% after Saudi Arabia announced a 500,000 a barrel a day increase in daily output to 9.45 million barrels. Both the IEA and EIA then trimmed their demand forecasts.
The Nymex also announced margin requirement increases as traders prepared for Wednesday’s weekly inventory reports.
The US Dollar index rose and Treasuries fell again on seemingly endless jawboning from government and Fed officials about inflation, yet there still have not been any real steps taken towards an actual change in policy – such as raising interest rates – that would do anything to actually combat inflation or help the Dollar.
What they say seems mostly worthless given that they also released on Tuesday the worst US trade deficit figures in 13 months at -$60.9bn for April. How that can be construed as Dollar positive?
Elsewhere in the markets Tuesday silver dropped under $17.00 by late trade in Asia, before it rose to within a penny of unchanged at $17.18 by early trade in New York. Silver then fell back off for most of the rest of trade and ended about 0.5% off its low of $16.48 with a loss of 3.61%
The Gold Price in Euros fell to about €562, platinum lost $46 to $1996.50, and copper fell over 5 cents to about $3.56.
Gold and silver equities dropped for most of the session and ended with over 4% losses.
The Dow, Nasdaq, and S&P traded mixed and near unchanged as optimism over lower energy prices battled expectations for high inflation and a weak economy.
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