Gold News

Gold Drops 2% as US Stocks Sink on Woeful Services Data; ECB to Follow Fed in Cutting Rates?

From Chris Mullen at GoldSeek.com...

Gold Prices fell on Tuesday, dropping to $884.45 by midmorning in New York before rebounding back near $900 by early afternoon.

But the Gold Market then fell back off in the last 30 minutes of trade and ended near its low with a loss of 2.02% for the day.

On the economic front, the ISM Services report followed the pattern of German and UK service activity reported earlier in the day, but accelerated the rate of decline to read a woeful 44.6 vs. 53.0 expected.

Crude oil fell on worries that a weakening economy will cut into demand, while the US Dollar index rose as the Euro fell on that weak German services survey, raising hopes that the ECB may join the Fed in cutting interest rates.

Treasuries rose as the Dow, Nasdaq, and S&P fell markedly on concerns about the health of the economy. Wednesday at 08:30 EST brings fourth quarter Productivity, expected to show a 0.5% improvement.

Silver fell to $16.255 before it rebounded back near $16.50, but it also fell back off in the last half hour of trade and ended with a loss of 2.51%.

The Gold Price in Euros fell to about €605, platinum lost $15 to $1776, palladium lost $8 to $416, and copper fell roughly 7 cents to about $3.20.

Gold and silver mining equities fell roughly 3% at the open and remained near their lows for most of the day.

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Adrian Ash

Adrian Ash, BullionVault Gold News

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

See the full archive of Adrian Ash articles on GoldNews.

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