Gold News

Gold Ends the Week 3.7% Higher as US Stocks Sink, Oil Falls & Food Prices Soar

From Chris Mullen at GoldSeek.com...

Gold Prices fell early Friday in London, hitting $887.25 before rebounding in New York to reach new all-time highs above $898.15.

The Gold Market then slipped $5 but rallied into the close to finish 3.7% higher for the week as the major US stock indices closed between 1% and 2.5% down.

Silver rose to $16.272 in London on Friday and then fell in New York. Rallying back in the last few hours of trade, it ended with a gain of 0.50% for the day at a new 27-year high.

The Gold Price in Euros rose to over €605, platinum gained $7 to $1559 to a new record high, palladium gained $3 to $376, and copper gained over 4 cents to about $3.31.

Gold and silver equities rose roughly 1% in the first hour of US trade, remained near their highs for most of the rest of the day, and closed at new record highs some 7% higher for the week on average.

On the economic front, US import prices rose strongly in Dec. but the rate of inflation slowed from November, when the trade deficit swelled to $63 billion from Oct.'s $57.8bn. The US Dollar index managed to rebound slightly from Thursday’s notable losses, however.

Next week’s economic highlights include Retail Sales, PPI, the New York Empire State Index, and Business Inventories on Tuesday; the CPI, Net Foreign Purchases, Industrial Production, Capacity Utilization, and the Fed’s Beige Book on Wednesday; Housing Starts, Building Permits, Initial Jobless Claims, and the Philadelphia Fed on Thursday; and then Leading Economic Indicators and Michigan Sentiment on Friday.

Back in Friday's action, strong demand forecasts and various USDA reports brought the grain complex to new multi-year highs. Soybeans rose to a new record high near $13 and corn was limit up 20 cents a bushel with talk of a repeat performance on Monday.

Crude oil however, continued to fall on further worries about the contracting US economy that will cut into future demand, and Treasuries rose as the Dow, Nasdaq, and S&P plummeted for most of the day on credit market worries and concerns over coming writedowns in earnings reports due to losses related to exposure to bad mortgage investments.

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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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