Gold rose $2.57 to $901.42 in Asia before it dropped to $882.80 by early trade in London and then climbed back near $900 by midmorning in New York, but it next fell back off in late morning trade and made a new low of $882.75 ahead of a $6.05 bounce form that low in afternoon trade that left it with a loss of 1.12%. Silver fell as much as $0.285 to $11.845 by midday in London before it rebounded in New York to see a $0.042 gain at $12.172 by about 11AM EST, but it then fell back off into the close and ended with a loss of 1.11%.
Gold closed Tuesday $9.90 lower to $898.85 after gaining $13.55 on Monday and silver remained unchanged at $12.13 on Tuesday after Monday’s $0.18 gain.
Euro gold fell to about €674, platinum close at $950, and copper rose slightly to about $1.48.
Gold and silver equities traded mostly slightly lower and ended with about 2% losses.
The Economy:
The Obama administration announced a Bad Bank plan that “will create banks to absorb the bad assets weighing down the financial system.” The world economic forum in Davos is providing a platform for world leaders to debate about what they should do to help the world economy.
The FOMC kept its target rate in a target range of 0% to 0.25% as they continue to see a weakened economy and credit conditions as extremely tight. The fed said they are prepared to buy longer term treasuries if it would improve the markets. Jeffrey Lacker dissented from the other 8 voting members with his preference of buying treasuries now instead of other assets. Regardless, the fed said rates will remain low “for some time.”
The House votes on Obama’s stimulus plan tonight and is expected to pass it on to the senate. Tomorrow at 8:30AM EST brings Durable Goods Orders for December expected at -2.0% and Initial Jobless Claims for 1/24 expected at 575,000. At 10AM is the New Home Sales report for December expected at 400,000.
Oil rose slightly despite more inventory builds on hopes for an increase in demand.
The U.S. dollar index rose and treasuries fell while the Dow, Nasdaq, and S&P rose on hopes that the “Bad Bank” plan and the fed’s measures will help the economy.
Among the big names making news in the market today were Wells Fargo, AT&T, Fannie Mae, WellPoint, and Abbott.
