From Chris Mullen at GoldSeek.com...
Gold rose to $925.13 by late trade in Asia on Tuesday before it fell as low as $907.50 early in New York.
The Gold Market then rallied back higher into the close and ended with a loss of just 0.9% for the day. Silver also rallied back in the afternoon US session but ended with a loss of 2.1%.
The Gold Price in Euros fell near €582, platinum lost $22.50 to $2008, and copper fell over 8 cents to about $3.91.
Gold and silver equities fell nearly 2% by late morning before they rebounded to find less than 1% losses by mid-afternoon, but they then fell back off in the last couple of hours of trade and ended with a little over 1% losses.
Minutes from the Federal Reserve’s 18th March meeting showed that several members and staff now see a US recession in the first half of 2008, as well as an increased inflation outlook. But they’re still banking on a second half recovery and then reduced inflation in 2009 compared to 2008. (Can Recession Kill Inflation? Read on here...)
The Fed’s open-market committee also debated that monetary policy alone cannot solve the housing and financial crises when it voted 8-to-2 to cut 0.75% off the cost of borrowing dollars last month.
Tuesday’s pending home sales report for Feb. showed a 1.9% drop from the Jan. figure, but it failed to dent the US Dollar index in early US trade.
The greenback then cut into its gains following the Fed’s minutes, but it still ended with a minor gain on the day. Treasuries rose on the short end but fell in longer dated maturities as traders compensated for both a recession and increasing inflation worries.
Oil held near unchanged and closed slightly lower on reports of waning demand, but prices remain just a few dollars from a new all-time high. All eyes now turn to Wednesday’s inventory reports, expected to show another drop in US gasoline stocks despite a reported decrease in demand.
The Dow, Nasdaq, and S&P fell on earnings reports that came in even worse than low expectations while many were also disappointed by the Fed’s minutes that revealed a greater bias towards recession than previously thought.
Wednesday at 10:00 EST brings the Wholesale Inventories report for February expected at 0.5%.
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