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Category: Gold

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Spot gold falls to six-month low of $1,562.90 an ounce

Gold
Spot gold took its fifth consecutive daily tumble Wednesday to $1,562.90 an ounce, plunking itself at its lowest price in six months.

The last time the precious metal was flirting with $1,550 was when it hit $1,562.30 on July 12. It then went on to reach a high of $1,888.70 on Aug. 22, as fearful investors fled from aftershocks of the U.S. debt downgrade.

The spike sparked speculation that the safe-haven commodity could breach the near-mythical $2,000-an-ounce threshold.

Those fantasies are now kaput, according to analysts — at least for the foreseeable future. The triple threat of a strong dollar, austerity programs in Europe and an overload of bullish investors has resulted in a “disconcertingly bearish concoction,” according to commodities analyst Dennis Gartman.

“Anybody who is long is under duress, anybody who is short is in control,” Gartman said of the gold situation. “There is something very serious going on.”

Throw into the mix the light volumes that are common during year-end trading and “it’s hard to tell what’s really going on this week,” said Matt Zeman, a metals trader with Kingsview Financial.
“It gets really goofy,” he said. “But the chart for gold doesn’t look healthy.”

Investors also tested gold’s $1,550 floor last week before the price briefly rebounded. But Zeman said the continuing downward pressure could eventually spark a sell-off of the metal.

“We may see it break wide open,” he said. “The best place to be in the gold market right now is on the sidelines.”

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Gold once again pushing $1,800 an ounce

Stocks, gold hit by broad sell-off on global jitters

— Tiffany Hsu

Photo: AP Photo / Sotheby's

Stocks, gold hit by broad sell-off on global jitters

Gold-blog

Raise cash, head for the sidelines.

That was the guiding sentiment in stock and commodity markets Thursday, as some investors and traders sold what they could and looked for a hiding place amid fresh doubts about the global economy.

Commodities took the heaviest hit: Gold futures dived $54.00, or 3%, to $1,719.80 an ounce in New York, the biggest one-day drop since Sept. 23.

The ThomsonReuters/Jefferies CRB index of 19 commodities slumped 2.5%, the biggest decline since Sept. 30. Corn, wheat, oil, cotton and copper all were sharply lower.

“There is liquidation across the board,” said Frank Cholly Sr., a senior commodities broker at RJO Futures in Chicago.

On Wall Street, stocks ended broadly lower for a second day. The Dow Jones industrial average, which tumbled 190 points on Wednesday, fell 134.86 points, or 1.1%, to 11,770. That cut the index's year-to-date gain to 1.7%.

Broader indexes were weaker. The Standard & Poor's 500 fell 1.7%; the Nasdaq composite lost 2%.

Some investors ran back to U.S. Treasury bonds, pushing the yield on the 10-year T-note down to 1.96% from 2.00% on Wednesday.

Many traders blamed continuing fears that Europe is headed for a major blow-up as its debt crisis worsens. Spain and France sold new bonds and were forced to pay yields far above the levels of a month ago.

General Motors Chief Executive Dan Akerson told the Detroit Economic Club that the European crisis is "much more serious" than the 2008 bursting of the credit bubble. GM shares fell 86 cents, or 3.8% to $21.79, a six-week low.

Still, Europe wasn’t a complete disaster Thursday: Italian bond yields pulled back from recent highs. And European stock markets were mostly down between 1% and 1.5%, relatively modest declines compared with the worst days of the last few months.

Meanwhile, markets seemingly ignored upbeat U.S. economic data, including a drop in new claims for jobless benefits to the lowest level since early April.

As they did in late September, some investors and traders may just be cashing out of whatever’s easiest to sell. That would include U.S. blue-chip stocks. The Dow is down 3.2% since Friday.

With so much uncertainty about Europe, and with the U.S. congressional deficit-cutting panel facing a Nov. 23 deadline to come up with a plan, some market players may just be calling it quits on 2011 early.

“I think it’s, ‘Just get out of things and wait til next year,’ ” said Frank Lesh, futures analyst at FuturePath Trading in Chicago.

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-- Tom Petruno

Photo: Gold jewelry, coins and bars are arranged for a photograph at a GoldMax store in Atlanta. Credit: Bloomberg News

Gold once again pushing $1,800 an ounce

GOLD
Eurozone instability has the price of gold back to flirting with $1,800 an ounce, with the spot price closing at $1,790.30 on Monday, up $35, to the highest level since Sept. 21.

After more than six weeks below $1,800, the metal’s sudden resurgence last week has analysts once again on the lookout for possible momentum toward $2,000 an ounce.

But $2,000 is “a big psychological number,” said James Steel, chief commodities analyst for HSBC. The closest gold’s gotten to breaking through is when it soared to $1,888.70 an ounce Aug. 22.

Since then, the metal’s price flattened as stocks plummeted. Gold hit $1,592.70 an ounce Sept. 26. Analysts suspected that investors were selling anything they could to raise cash.

October and the first week of November brought a steady stream of concerns over the debt crisis in Greece and Italy, causing gold to shift back to its classic role as a haven in times of turmoil.

With pressure on Italian Prime Minister Silvio Berlusconi to resign and Greek Prime Minister George Papandreou’s weekend ouster, some analysts believe gold will hold above $1,800 for months.

“It’s going to last for some time and be the driving force for the market for the rest of the year,” Steel said. “Gold’s gone back to behaving more normally.”

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Gold and other metals get pounded

Gold jumps as European Central Bank cuts interest rates

-- Tiffany Hsu

Photo: Reuters / Mike Segar

Gold jumps as European Central Bank cuts interest rates

Gold coins
Gold broke out to a six-week high Thursday after the European Central Bank surprised markets by cutting interest rates.

For investors who believe that paper currencies are headed for further debasement by central banks, the move provided a good excuse to shovel money into precious metals as an alternative.

Near-term gold futures in New York rose $35.50, or 2.1%, to $1,764.20 an ounce, the highest closing price since Sept. 21.

Silver got a smaller lift, adding 56 cents to $34.49 an ounce. Silver had reached a five-week high of $35.29 last Friday.

The ECB, under new chief Mario Draghi, cut its benchmark short-term rate to 1.25% from 1.50%, in the first reduction since May 2009.

Draghi said the cut was justified because he believed the Eurozone economy was headed for a “mild recession.” Europe has been reeling from its debt crisis and from the austerity imposed by government spending cuts.

The euro currency initially slid after the surprise rate move, falling as low as $1.367 from $1.374 on Wednesday. But the euro rebounded after Greece’s prime minister reneged on his threat to hold a voter referendum on the terms of the country’s bailout by the rest of Europe. The euro was at $1.382 at about 1 p.m. PDT.

Draghi vowed the ECB would not accede to calls that it print massive amounts of new money to boost its purchases of sovereign bonds in Europe. But that didn't deter gold buyers.

Gold had rocketed in August, reaching a record closing high of $1,888.70 an ounce Aug. 22, as stock markets tumbled worldwide on fears that the Eurozone would implode.

But as stocks fell further in September, gold and silver too were slammed. Many analysts say the metals took a hit as some investors and traders sold whatever they could to raise cash amid continued market turmoil.

After bottoming at $1,595 on Sept. 26, gold has been fighting its way higher again. It’s now down 6.6% from its August peak but up 24% year to date -- on track for an 11th straight annual gain.

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-- Tom Petruno

twitter.com/tpetruno

Photo: Gold coins and bars. Credit: Mike Segar / Reuters

Wall Street: Stocks up on European plan

Wall Street: The European debt deal is helping to send stocks up
Gold: Trading now at $1,723 an ounce, unchanged from Wednesday. Dow Jones industrial average: Trading now at 12,095.29, up 1.9% from Wednesday.

European optimism. The European debt deal announced last night, along with some good economic data, is helping to send stocks up this morning.

Gimme shelter. As winter approaches in New York, the Occupy Wall Street protesters are said by CNBC to be looking for an inside space that will allow them to escape the cold.

Sad second act. The former head of Goldman Sachs and governor of New Jersey, Jon Corzine, made it his mission after leaving the governor's mansion to help a small brokerage firm rise -- instead the firm appears now to be close to implosion. 

Rolling Stone rant. Rolling Stone brings you the latest anti-Wall Street screed from the man who called Goldman Sachs the "vampire squid."

The SEC and the financial crisis. A ProPublica columnist says that the latest financial-crisis case -- this one against Citi -- suggests that the Securities and Exchange Commission appears to be deciding which cases to pursue based on who wrote the most imprudent emails.

-- Nathaniel Popper in New York
Twitter.com/nathanielpopper

Photo credit: Stan Honda / Getty Images

Stocks fall, gold surges on new Europe fears

Germanparliament
Wall Street bulls retreated Tuesday amid worries that European leaders have failed to reach agreement on key elements of a new plan to end their debt crisis.

A jump in investors’ fear level showed in the gold and Treasury-bond markets, as the metal’s price surged and bond yields tumbled.

The Dow Jones industrial average sank 207 points, or 1.7%, to close at 11,706.62, as stocks fell broadly after rising Monday to their highest levels since early August.

If investors needed a reason to take profits after the surprising October rally, Europe provided a suitable excuse: The market weakened early in the day after a meeting of European Union finance ministers set for Wednesday was canceled.

Yet authorities said a planned meeting of EU heads of state would proceed. The EU leaders’ summit has been expected to produce the framework for bolstering the continent’s banks and boosting the firepower of the $600-billion rescue fund for Eurozone member states.

Reports from Europe said leaders were still bickering over key points, including the amount of Greek government debt that European banks would forgive, and whether the European Central Bank would be urged to continue buying government bonds to pull down interest rates.

That raises the prospect that the summit will be short on details and long on promises -- which could stoke new fears of another market rout in Europe.

Investors’ jitters drove gold up $48.10, or 2.9%, to $1,699.60 an ounce in New York, a five-week high. Money also poured into U.S. Treasury bonds, pushing the 10-year T-note yield down to a two-week low of 2.11% from 2.24% on Monday.

On Wall Street, the Russell 2,000 small-stock index fell 3% after rising 3.3% on Monday, when it broke out of the trading range where it had been stuck for the last two months.

But U.S. markets seemed more nervous than their European counterparts. European stocks suffered only modest declines, losing 1% to 1.5%. And the euro was steady at $1.391.

U.S. stocks have surged since Oct. 3, as investors have been pleasantly surprised by data suggesting that the U.S. economy continues to expand, if moderately. The Dow is up 9.9% since Oct. 3.

Yet many investors remain sidelined, fearful that the rally could melt away in a hurry.

On Tuesday, a monthly report on consumer confidence showed a dive this month to the lowest levels since March 2009, in the depths of the recession. Some analysts, however, noted that even as consumers say they’re gloomy, they’ve continued to spend.

On Thursday the government will report its first estimate of third-quarter economic growth. A survey of economists by Bloomberg News shows the average estimate is for an annualized growth rate of 2.5%, which would be a big improvement from the 1.3% rate of the second quarter.

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-- Tom Petruno

twitter.com/tpetruno

Photo: The European Union flag flies in front of the German parliament building in Berlin. Credit: Kay Nietfeld / EPA

Gold surges, stocks fall on new Europe worries

Euroflag
Gold zoomed and stocks pulled back Tuesday as markets faced new worries about Europe’s down-to-the-wire talks aimed at ending its debt crisis.

European stocks fell late in the session after a meeting of European Union finance ministers set for Wednesday was canceled. Yet authorities said the planned meeting of EU heads of state would proceed.

The EU leaders’ summit has been expected to produce the framework for bolstering the continent’s banks and boosting the firepower of the $600-billion rescue fund for Eurozone member states.

Herman Van Rompuy, the European Council president, sought to downplay the cancellation of the finance ministers’ meeting, telling Reuters that the ministers “may meet in the coming days to fine-tune decisions that will be taken tomorrow.”

The euro currency isn’t showing any signs of panic: The euro was trading at $1.393 at about 11 a.m. PDT, up slightly from Monday.

But some investors and traders rushed into gold, the classic haven. Near-term gold futures in New York jumped $49.30 to $1,700.80 an ounce, the first move above $1,700 since Sept. 22.

European stock markets were mostly down between 1% and 1.5%, relatively modest losses.

On Wall Street, stocks also were lower after rallying Monday to their highest levels since early August. The Dow Jones industrial average was off 131 points, or 1.1%, to 11,781 at about 11 a.m. PDT.

[Updated at 1 p.m. PDT: The Dow ended the session down 207 points, or 1.7%, to 11,706, after three straight daily gains.]

The U.S. market also was weighed down by the latest dismal report on consumer confidence.

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— Tom Petruno

twitter.com/tpetruno

Photo: The European Union flag flying near the Parthenon in Greece, the epicenter of Europe's two-year-old debt crisis. Credit: Petros Giannakouris / Associated Press

Wall Street: Stocks and gold rise

Wall Street: European leaders are beginning crucial talks aimed at finding a solution to the sovereign debt crisis
Gold: Trading now at $1,647 an ounce, up 2.1% from Thursday. Dow Jones industrial average: Trading now at 11,738.45, up 1.7% from Thursday.

Looking to Europe. European leaders are beginning crucial talks aimed at finding a solution to the sovereign debt crisis, and investors seem to be optimistic about the outcome.

Citi's roadblock. Citi is trying to put its subprime mortgage problems behind it with a settlement this week -- but first the settlement has to make it past a judge who has rejected past deals that let banks off without any admission of guilt.

Main Street needs Wall Street. Time magazine takes a look at why the recent struggles of Wall Street banks are not a good thing for Main Street.

Baldwin on the Fed. On a walk through the Occupy Wall Street encampment, Alec Baldwin calmly takes on a number of Ron Paul supporters asking the actor to throw his weight behind ending the Federal Reserve.

-- Nathaniel Popper in New York
Twitter.com/nathanielpopper

Photo credit: Stan Honda / Getty Images

Wall Street: Stocks and gold up again

Wall Street: Stocks and gold up again
Gold: Trading now at $1,681 an ounce, up 1.2% from Tuesday. Dow Jones industrial average: Trading now at 11,522.26, up 0.9% from Tuesday.

Another up day. Stocks opened higher yet again as fear about the European financial crisis ebbs.

Fighting Volcker. Banks had been lobbying regulators hard before the release of a draft of the Volcker rule -- one of the most important pieces of the financial reform legislation -- and now that the draft is out, they will continue their lobbying effort.

Psychic help. As bankers try to figure out how to deal with tough economic conditions, at least some of them are turning to psychics for guidance. 

-- Nathaniel Popper in New York
Twitter.com/nathanielpopper

Photo credit: Stan Honda / Getty Images

Wall Street: Stocks and gold rising

Wall Street
Gold: Trading now at $1,668 an ounce, up 2.0% from Friday. Dow Jones industrial average: Trading now at 11,360.94, up 2.3% from Friday.

Big Monday. Stocks are having a big day as investors grow encouraged about the rescue effort in Europe and financial data in the U.S.

Recession averted? Bloomberg thinks the good economic data of the last week is enough to say that a recession has been averted. 

Earnings season. Bank earnings season begins again this week, and the results are not expected to be good.

Lehman averted? A struggling Belgian bank was broken up in a surprisingly peaceful fashion over the weekend, averting what some thought would be a calamitous collapse.

Nail in the coffin. One of the last vestiges of Bernie Madoff's empire -- a trading division that had been sold off after Madoff's Ponzi scheme was exposed -- has now bitten the dust.

Paulson's bad year. For John Paulson, the hedge fund magnate who made billions of dollars betting against the subprime mortgage market, the bad news keeps coming -- one of his funds has lost almost 50% since the beginning of the year.

-- Nathaniel Popper in New York
Twitter.com/nathanielpopper

Photo credit: Stan Honda / Getty Images

Wall Street: Bad quarter ends with stocks and gold falling

Wall Street
Gold: Trading now at $1,615 an ounce, down 0.1% from Thursday. Dow Jones industrial average: Trading now at 11,064.89, down 0.8% from Thursday.

Goodbye to a bad quarter. As the worst quarter for stocks since the financial crisis comes to a close, investors are showing some pessimism today.

Investors turn on Obama. President Obama's favorability ratings among investors have plummeted in recent months, though he can take consolation in approval among investors for his plan to tax those earning $1 million-plus a year. 

DJ + S&P. The two kings of the stock index world -- Standard & Poor's and Dow Jones -- are talking about joining forces.

-- Nathaniel Popper in New York
Twitter.com/nathanielpopper

Photo credit: Stan Honda / Getty Images

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