Gold News

Gold Slumps to Two-Week Low as Oil Sinks; US Growth Slowing, Inflation Rising

From Chris Mullen at

Gold Prices rose slightly to $901.45 by late trade in Asia on Thursday, but then fell hard throughout London and New York hours to reach a two-week low.

Crude oil lost more than 3% despite bouncing back from early lows after an astounding drop of 8.8 million barrels was reported in US oil inventory stockpiles, bringing the price back near $133.

The cost per barrel soon fell back off to end over $4 lower for the day on the view that recent high prices are finally starting to cut into demand. The large decline was clarified as reportedly due to temporary delays along the Gulf Coast.

The Dow, Nasdaq, and S&P rose on reduced recession worries and optimism over lower energy prices in the future. The Gold Market ended about 0.5% off its low of $873.00 with a loss of 2.55%.

Silver rose over 1% to $17.56 by late trade in Asia, but it also fell off markedly in London and New York and ended near its low of $16.46 with a loss of 4.64%.

The Gold Price in Euros fell to about €566, platinum lost $75 to $1989, and copper fell over 15 cents to about $3.57.

Gold and silver equities fell over 3% by early afternoon and remained near their lows into the close.

The US Dollar index rose and Treasuries fell after US economic growth was reported for the first quarter as expected at 0.9% annualized. This sent interest rates higher in the open market after the GDP deflator – a measure of inflation in prices – was revised up to 3.5% year-on-year vs. 2.6% forecast.

The yield on the 10-year note rose to its highest since December 2007.

Friday at 13:30 GMT brings US Personal Income and Spending for April, both expected at 0.2%, and PCE Core Inflation expected at 0.1%.

At 14:45 GMT comes Chicago PMI and then the Reuters-Michigan Consumer Sentiment index for May, expected to show a slight drop.

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Adrian Ash

Adrian Ash, BullionVault Gold News

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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