By Jon Nadler
Gold prices fell further overnight, following yesterday oil-led and hawkish Fed-induced rout. Further losses in the euro following reports of steep drops in Eurozone industrial orders helped the greenback climb to near 72.61 on the index and reduced the appeal of gold along with its value.
Prices skirted a low of $931 ahead of the Wednesday NY session. Oil prices dropped further, as the oil installations in the Gulf of Mexico appeared to have avoided what could now be a Cat 2 storm slated to hit the US/Mexico border later today. If there was some supporting factor for prices not yet slipping into the $920's it was likely to be Iran's vow to pursue its nuclear technology program and claim that the US recognizes its rights to acquire such capabilities. In other regional news, the UK appears all set to have most or all of its troop leave Iraq in early 2009.
New York's midweek gold trading session opened with a $9.50 loss in the metal, at $935.50 per ounce as the trade monitored oil values near $126 - more than $20 from their recent peak- and the euro trading at 1.574 against the US dollar. Today's calendar has the Fed's Messrs. Mishkin and Kohn due to speak at a conference, and the Fed's Beige Book is on tap as well.
Silver showed initial losses of 28 cents to open at $17.63 while the noble metals complex continued to slip with platinum losing a massive $68 to $1752 and palladium cracking the $400 level to sink to $386 per ounce, off $17 on the day. South Africa's power supplier -Eskom- forecast no load shedding events for the winter as the crisis phase of the situation appears to have been overcome for now. The country's mines appear to have limped along with the 90 to 95 percent level of available electricity and are slated to yield more metals as the situation stabilizes and/or improves. Such developments contributed to the white metals fading in value this morning as well.
In a move that is likely not just designed to freshen gold's image, the World Gold Council has decided that the tune it sings to India's gold buyers needs to be altered. Abandoning its "Speak Gold" campaign, the organization now plans to got directly for the proverbial jugular and highlight gold's historic and deeply ingrained allure and connection within the culture of India. That this shift has something to do with the 65% slump in gold imports recorded in the first half of this year in the world's top bullion-consuming country should be quite obvious.
Well, at least something is being done about the matter. As one Indian jeweler in Vancouver put it last night: "Well, now if they can only do something about the price of the metal..." Someone, somewhere is trying to do something about the price of black...gold. Bloomberg reports that the US "Congress may outlaw elements of oil futures trading that lawmakers found distorted demand and contributed to the 69 percent surge in prices in the past year.
Continued...
