Gold Seeker Closing Report: Gold and Silver Fall With Stocks and Oil
By: Chris Mullen, Gold-Seeker.com
The Metals:
Gold and silver traded slightly lower in Asia and London before the rose sharply at the New York open and climbed to as high as $759.55 and $10.78 by about 9AM EST, but they then fell back off in late morning trade and ended not far from their lows of $728.35 and $9.88 with losses of 1.25% and 3.44%.
Euro gold fell to about €576, platinum lost $28 to $835, and copper fell nearly 10 cents to about $1.72.
Gold and silver equities rose over 3% at the open, but they then fell back off for most of the rest of trade and ended with about 9% losses.
“The Labor Department reported Thursday that the number of people continuing to draw unemployment benefits jumped by 122,000 to 3.84 million in late October, well above analysts' estimates of 3.74 million.”
Tomorrow at 8:30AM EST brings October’s jobs data. Nonfarm Payrolls are expected at -200,000, the Unemployment Rate is expected at 6.3%, Hourly Earnings are expected at 0.2%, and the Average Workweek is expected at 33.6. At 10AM are Pending Home Sales for September expected at -3.4% and Wholesale Inventories for September expected at 0.3% and at 3PM is Consumer Credit for September expected at $0.0 billion.
The Markets:
Oil fell to the lowest since March 21, 2007 on more economic and demand worries while the U.S. dollar index rose as the Bank of England cut by a larger than expected 150 basis points or 1.5% to 3% and the European Central Bank cut by 50 basis points to 3.25%.
Treasuries rose only slightly as concerns over pending supply battled safe haven buying from the fact that the Dow, Nasdaq, and S&P plummeted again on worries over the health of the economy. After over 5% losses yesterday, the three indices suffered losses of roughly 5% more today.
Among the big names making news in the market today were OfficeMax, Toyota, Citigroup, Goldman Sachs, Macy’s, Target, Gap, Wal-Mart, Blackstone, AIG, and Dana.
The Commentary:
“December Gold closed down 10.2 at 732.2. This was 2.2 up from the low and 25.8 off the high.
December Silver finished down 0.4 at 10.055, 0.645 off the high and 0.085 up from the low.
Initially the gold bulls thought they had control as the very aggressive international rate cut moves briefly rekindled inflationary expectations or perhaps for a couple of seconds even hopes of growth. In the end, the deflationary crowd seemed to regain control which wasn't all that surprising in the face of a sharp upward thrust in the Dollar and a serious downshift in the stock market. In fact, with the energy complex and a host of physical commodity markets falling sharply the downdraft spillover seemed to be in almost every market.
While some silver players hoped that silver might hold up better than gold, the interest or lack of interest in the silver/gold or gold/silver spreads was apparently a secondary factor in the face of renewed deflationary fears. Clearly seeing the Dollar strengthen and seeing both copper and platinum prices under pressure meant that silver was seeing negative influences from a number of different directions.”- The Hightower Report, Futures Analysis and Forecasting
