(CEP News) - Commodities are mixed on Tuesday morning with lowered gold prices the main story, due to a decrease in risk aversion.Chicago Board of Trade (CBOT) gold is trading up $6.70 per ounce to $841.20 USD. It had been as high as $857.00 earlier in the session. In Canadian dollars, gold is up $9.32 to C$965.05. Silver contracts at the CBOT are up $0.18 to $10.88. Bloomberg's index for base metals is up 2.04 points to 168.38. CMC Markets analyst Colin Cieszynski believes the key issue here is not that gold has dropped in price on Tuesday, but that it hasn't dropped below a certain point. "Gold has continued to hold above $825/oz while silver has held above $10.00/oz," he wrote. "This suggests that some investors may view recent banking system developments as potentially inflationary which may continue to support long-term bullish trends in precious metals." As part of its bailout plan, the U.S. Treasury announced on Tuesday that it will purchase as much as $250 billion in preferred shares of financial institutions, insure all non-interest bearing deposits and guarantee senior bank debt. The plan involves buying senior preferred shares that are non-voting and callable after three years. A second part of the plan involves the Federal Deposit Insurance Corporation temporarily guaranteeing the senior debt of all insured institutions and their holding companies as well as deposits in all non-interest bearing deposit transaction accounts. In a separate announcement, the Federal Reserve announced it would begin funding purchases of commercial paper on October 27, 2008. The Board authorized the Commercial Paper Funding Facility on Oct. 7 to provide a liquidity backstop to U.S. issuers of commercial paper. "Federal Reserve Chairman Ben Bernanke stated emphatically that the Treasury and the Federal Reserve will not 'stand down' until the financial crisis is brought under control," wrote Global Insight chief U.S. financial economist Brian Bethune. "That is the kind of leadership that the markets and the American public are looking for as we have reached the crux of the financial crisis that has been raging for over a year." Meanwhile, crude oil is down with West Texas Intermediate crude oil down $0.97 per barrel to $80.22. Intercontinental Exchange (ICE) RBOB gasoline futures are, however, up 0.61 cents per gallon to 192.37 cents. Heating oil at the ICE is down 1.07 cents per gallon to 235.88 cents. Natural gas is down $0.021 mmbtu to $6.687. Wheat futures at the CBOT are down $2.00 to $586.50. All data taken at 11:20 a.m. EDT. By Ryan Szporer, rszporer@economicnews.ca and Adam Button, abutton@economicnews.ca, edited by Sarah Sussman, ssussman@economicnews.ca CEP Newswires - CEP News ? 2008. All Rights Reserved. www.economicnews.ca The Copying, Broadcast, Republication or Redistribution of CEP News Content is Expressly Prohibited Without the Prior Written Consent of CEP News. A copy of CEP News disclaimer can be found at http://www.economicnews.ca/cepnews/wire/disclaimer.

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