MW; Gold zigzags amid uncertainty, but silver tumbles
By Moming Zhou, MarketWatch
NEW YORK (MarketWatch) -- Gold futures swung between gains and losses Wednesday, trading around $840 an ounce as nervous investors watched government efforts in the U.S. and Europe to rescue the ailing financial industry.
Analysts had projected gold to surge as the global rescue efforts to inject liquidity into the market are expected to push up inflation rates. But gold's recent volatility has repeatedly defied their expectations. The precious metal had lost $67 over the previous four sessions.
"People currently seem to prefer to sit on cash," said Jon Nadler, senior analyst at Kitco Bullion Dealers. "Another reason gold isn't rising is that investors are scrambling to meet margin calls, and they have to sell even their gold investment."
Gold for December delivery was last seen almost flat at $839.60 an ounce on the Comex division of the New York Mercantile Exchange. It rose as high as $851.40 overnight as the U.S. dollar fell. The greenback has since pared its losses.
Recent trading of the precious metal has seen increasing volatility, in line with the uncertainties in global stock markets. After the early week's surge, stock markets in Asia and Europe plunged Wednesday, while U.S. index futures were also indicating a lower opening.
Gold exchange-traded funds also saw lower demand. Assets in the SPDR Gold Trust , the largest gold ETF, fell to 767.58 tons Tuesday, down from Monday's record of 770.64 tons, according to the latest data from the fund.
Some analysts, however, said it's only a matter of time before gold rises.
"An extraordinary amount of liquidity has been pumped into the system this year," said Peter Grant, senior analyst at USAGOLD. "I anticipate further debasement of all currencies, including the dollar, which will ultimately drive gold prices higher."
Silver falls over 5%
In other metals Wednesday, December silver tumbled 64 cents, or 5.8%, to $10.42 an ounce.
Copper for December delivery dropped 5.4% to $2.2650 a pound. January platinum fell 4.5% to $997 an ounce, and December palladium slid 2.9% to $198.70 an ounce.
In spot trading, the London gold-fixing price -- used as a benchmark for gold for immediate delivery -- stood at $848.50 an ounce Wednesday morning local time, up $16 from Tuesday afternoon.
