Gold and other precious metals spiked Thursday, as did crude oil and US stocks following a report by the Commerce Department saying the economy expanded at a 3.5 percent annualized pace in the third quarter. Gold’s rise broke a losing streak that had extended to five days. The Dow and S&P enjoyed their best one-day jumps in three months.

New York bullion figures follow:

• Silver for December delivery jumped 41.5 cents, or 2.6 percent, to $16.655 an ounce. It ranged from $16.12 to $16.71.

• Gold for December delivery advanced $16.60, or 1.6 percent, to $1,047.10 an ounce. The yellow metal ranged from $1,048.40 to $1,026.90.

• January platinum surged $31.30, or 2.4 percent, to $1,338.20 an ounce.

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Read the rest of Gold, Silver and US Stocks Rally (2,395 words)

Gold ended slightly lower Wednesday, marking the fifth consecutive day the yellow metal has declined. Again cited as the catalyst for the loses was a rallying US dollar. Silver and platinum also fell, as did crude oil which plunged 2.6 percent. US stocks followed along, with the three major indexes tumbling between 1.2 percent and 2.7 percent.

New York precious metals figures follow:

• Silver for December delivery fell 30 cents, or 1.8 percent, to $16.240 an ounce. It ranged from $16.155 to $16.77.

• Gold for December delivery declined $4.90, or 0.5 percent, to $1,030.50 an ounce. The yellow metal ranged from $1,042.60 to $1,027.10, which is the lowest price since Oct. 6.

• January platinum ended down $12.10, or 0.9 percent, to $1,306.90 an ounce.

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Read the rest of Gold Continues Decline for Day Five, Stocks Tumble (2,367 words)

New York gold futures ended lower Tuesday for the fourth straight day as the US dollar advanced on news of a decline in consumer confidence. Silver was hit exceptionally hard for the second straight day, falling more than 3 percent. Platinum declined as well. In other markets, crude oil finished 1 percent higher and US stocks ended mixed.

New York precious metals figures follow:

• Silver for December delivery plummeted 55.5 cents, or 3.2 percent, to $16.540 an ounce. It ranged from $17.250 to $16.500.

• Gold for December delivery declined $7.40, or 0.7 percent, to $1,035.40 an ounce. The yellow metal ranged from $1,044.30 to $1,032.90, which was the lowest level since Oct. 6.

• January platinum fell $26.80, or 2.0 percent, to $1,319.00 an ounce.

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Read the rest of Gold Drops for Fourth Day, Silver Plunges, Stocks Mixed (2,493 words)

Przemyslaw Radomski submits:

This essay is based on the Premium Update posted October 23rd, 2009

The crude oil market has lost most of its popularity since it is no longer near $150 per barrel (no longer do oil-related topics dominate the main financial websites), but nonetheless I’m sure that nobody can deny crude oil’s importance in today’s globalized economy. It is vital for both businesses and individual consumers, as fuels are derived from it. Most of us need to drive and purchase goods that also need to be transported to us directly or indirectly.

Read more »

Precious metals enjoyed modest gains on the week as the US dollar was the predominating driver of where prices went. A weaker greenback on Friday combined with lower crude oil prices helped gold slide slightly from earlier week highs. Oil did jump nearly 3.5 percent this week while gasoline prices at the pump were almost 13 cents higher than last Saturday.

In other markets, US stocks declined for the first week in three while European indexes finished mixed with the London FTSE advancing.

In London bullion weekly figures, gold climbed 1.4 percent, silver rose 2.0 percent and platinum jumped 2.4 percent. Friday precious metals prices follow:

London silver closed to $17.65 an ounce, rising 34 cents from last Friday’s close. New York December silver futures ended at $17.723 for a 30.3 cent weekly increase.

London gold was fixed at $1,061.75 an ounce for a $14.25 gain on the week. New York gold for December delivery finished at $1,056.40 for a weekly gain of $5.70.

London platinum ended at $1,372.00 an ounce, advancing $32.00 since last Friday’s close. New York platinum for January delivery ended at $1,369.50 for a $21.00 weekly rise.

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Read the rest of Bullion & Business Weekend Report – Oct. 24 (1,447 words)

Gold declined nearly $6 Thursday, breaking away from a four-day winning streak as the US dollar gained ground. Silver and platinum also fell, as did crude oil which retreated from a one-year high. US stocks rallied on positive news from several corporate earnings reports.

New York precious metals figures follow:

• Silver for December delivery fell 28 cents, or 1.6 percent, to $17.545 an ounce. It ranged from $17.365 to $17.790.

• Gold for December delivery declined $5.90, or 0.6 percent, to $1,058.60 an ounce. The yellow metal ranged from $1,052 to $1,062.40.

• January platinum edged lower by $4.50, or 0.3 percent, to $1,369.90 an ounce.

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Read the rest of Gold, Commodities Decline; Stocks Rally (468 words)

Gold ended higher Wednesday and for the fourth straight day as a decline in the US dollar propped precious metals higher — silver and platinum advanced as well. In other markets, crude oil surged above $81 a barrel to a one-year high while US stocks retreated from their own earlier one-year highs.

New York precious metals figures follow:

• Silver for December delivery rose 26.7 cents, or 1.5 percent, to $17.825 an ounce. It ranged from $17.300 to $17.835.

• Gold for December delivery climbed $5.90, or 0.6 percent, to $1,064.50 an ounce. The yellow metal ranged from $1,048.10 to $1,065.70.

• January platinum advanced $18.10, or 1.3 percent, to $1,374.40 an ounce.

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Read the rest of Gold, Silver Rise; Stocks Fall (1,839 words)

CISA figures showed that daily crude output rose to within a whisker of August’s record levels

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By Moming Zhou, MarketWatch

NEW YORK (MarketWatch) — Gold futures rose on Monday, as investors
embraced more risk, pressuring the dollar, lifting stocks and helping
crude-oil futures test new highs for the year above $79 a barrel.

Copper also gained more than 4% before giving back some gains after
China estimated that its economy grew 9% in the third quarter.

Gold for December delivery, the most actively traded contract, rose
$2.60, or 0.2%, to $1,054.10 an ounce on the Comex division of the New
York Mercantile Exchange. The thinly traded October contract also
gained 0.3% to $1,053.50. . . .

The dollar, which has been used as a safe-haven currency, sank further, while the euro rose 0.2% to $1.4942. The dollar index
/quotes/comstock/11j!i:dxy0
(DXY
75.34,
-0.30,
-0.40%)
lost 0.3% to 75.409. See Currencies.

A weaker dollar lifts the price of dollar-denominated commodities and heightens gold’s appeal as a safe asset.

Crude-oil futures rose as much as $79.05 a barrel, a new high for the year.
See Futures Movers.

Gold rose “with oil reaching a new high for the year above $79 a
barrel, and the Federal Reserve signaling interest rates will stay near
record lows for the foreseeable future, the beleaguered greenback fell
to a 14-month low on the dollar index,” said analysts at GoldCore in a
note.

The dollar came under further pressure after the Federal Reserve Bank
of New York clarified it has been testing reverse repurchase agreements
for technical reasons, and that the tests should not be seen as hints
of a tighter monetary policy. See full story.

Separately, Fed Chairman Ben Bernanke called for policy makers to watch
for the restrengthening of unsustainable global imbalances driven by
high levels of Asian exports and low U.S. savings rates as the global
economy rebounds. See full story.

Read more….

By Pham-Duy Nguyen

Oct. 19 (Bloomberg) — Gold’s rally to a record means
prices are still 53 percent below the 1980 inflation-adjusted
peak.

While gold rose 19 percent this year to $1,072 an ounce on
Oct. 14, consumer prices almost tripled in the past three
decades, eroding the metal’s value. Bullion hasn’t kept pace
with the cost of bread, fuel or medical care. In 1980, gold hit
a then-record $873 an ounce. In today’s dollars, that would be
$2,287, according to the U.S. Labor Department’s inflation
calculator.

Record government debt and interest rates close to zero
percent are pushing gold higher for a ninth straight year, and
options show investors expect the rally to continue. When prices
reached all-time highs, the contract with the most open interest
was the December call to buy the metal at $1,200. The contract
to purchase at $1,500 an ounce was the third biggest.

“Gold is not at any peak,” said Martin Murenbeeld, the
chief economist at Toronto-based DundeeWealth Inc., which
manages $58.5 billion in mutual funds and brokerage accounts.
“The world’s money supply has increased and gold hasn’t kept
pace,” he said. “We’re now in a period where gold is catching
up.”

The U.S. Dollar Index, which measures the currency against
those of six major trading partners, fell on Oct. 15 to the
lowest level in 14 months, and has dropped about 7 percent this
year. President Barack Obama has increased the nation’s
marketable debt 22 percent to $7.01 trillion to revive growth.

Preserving Value

Gold bulls say today’s record borrowing and low interest
rates mean the government will have to accept faster inflation
as the economy recovers. Investors buy bullion to preserve value
during times of turmoil and economic stress.

Financial institutions worldwide have reported credit
losses and writedowns of about $1.62 trillion since the start of
2007, when the credit crisis began. Group of 20 governments have
pledged about $11.9 trillion to ease credit and revive economic
growth, according to the International Monetary Fund.

“Gold is the hedge against currency devaluation,” John
Brynjolfsson, of hedge fund Armored Wolf LLC, said in a
Bloomberg Television interview from Aliso Viejo, California, on
Oct. 7. He predicted bullion will top $2,000.

Banks have raised their gold estimates. On Oct. 9, JPMorgan
Chase & Co. said the metal will average $1,006 an ounce next
year, compared with an earlier projection of $950. Deutsche Bank
AG forecast an average of $1,150, up 32 percent from its
estimate in July. Barclays Capital said Oct. 12 that “prospects
for a run at $1,500 should not be underestimated” next year.

Understated CPI

Gold would need to rise more than sixfold to top the 1980
record, using a more accurate inflation-adjustment, said John
Williams, an economist and the editor of Berkeley, California-
based Shadowstats.com. He said the government has understated
the cost of living over the past two decades with adjustments in
the way it measures the basket of goods and services monitored
by the U.S. consumer price index, or CPI.

Gold futures for December delivery closed Oct. 16 at
$1,051.50 an ounce on the New York Mercantile Exchange’s Comex
division, gaining for a third straight week.

“If the methodologies of measuring inflation in 1980 had
been kept intact, gold would have to hit $7,150 to be the
equivalent of the 1980 record,” Williams said.

The cost of living in the U.S. rose 0.2 percent last month,
the Labor Department said on Oct. 16. Compared with a year
earlier, consumer prices fell 1.3 percent. The CPI will drop 0.5
percent this year, before rising 1.9 percent in 2010, reflected
by the median estimates of 61 economists in a Bloomberg survey.
Annual increases averaged 2.8 percent a year in the past decade.

Purchasing-Power Adjustment

In March 1980, inflation surged to a 14.8 percent annual
rate, two months after gold capped a four-year rally. Adjusted
for the decline in the dollar’s purchasing power since then,
gold’s Oct. 14 record of $1,072 represents the equivalent of
$409 in 1980 dollars, the Labor Department calculator shows.

Since January 1980, the average price of a pound of white
bread has risen almost threefold, from about 50 cents to $1.38
in August, and medical care has surged more than fivefold, Labor
Department figures show. Gasoline and electricity prices have
more than doubled.

Today, the gap between gold’s spot price and its CPI-
adjusted equivalent is the widest ever.

Gold hasn’t been as effective a hedge against inflation as
oil since the 1980s, said Matt Zeman, of LaSalle Futures Group
LLC in Chicago.

Oil Beats Gold

Crude passed its 1981 inflation-adjusted record two years
ago. The cost of imported oil averaged $39 a barrel in February
1981, after Iran cut exports, according to the Energy
Department. That’s $89 in 2007 dollars, the Labor Department
calculator shows. Oil reached a record $147.27 on July 11, 2008,
and closed at $78.53 on Oct. 16 in New York trading.

“If you bought gold in the 1980s, you’re still losing
money today,” said Zeman, a metals trader. Gold prices in New
York languished for two decades after declining from the 1980
record, dropping to a 20-year low of $253.20 on July 20, 1999.

While bulls say gold is cheap, the inflation-adjusted price
is 15 percent above its 30-year average, Bloomberg data show.

The Federal Reserve may limit gains by raising interest
rates before inflation balloons, analysts said. Fed Chairman Ben
S. Bernanke said on Oct. 8 that policy makers will need to raise
interest rates “at some point” to control inflation.

‘Prepared to Tighten’

“When the economic outlook has improved sufficiently, we
will be prepared to tighten,” Bernanke said in remarks prepared
for an Oct. 8 conference in Washington.

Fed moves to cool inflation and the government’s revenue
needs will stop gold, according to Jon Nadler, a senior analyst
for Montreal metals dealer and refiner Kitco Inc.

“These wild calls for several-thousand-dollar gold are
typical of times when gold goes into uncharted territory,”
Nadler said. “The Fed will pull the interest-rate trigger and
the Obama administration will, in addition, pull the tax-hike
trigger before we get into any serious inflation. Once the man
on the street gets in, the gold rally is likely over.”

Gold held in exchange-traded funds climbed to records this
month at Zuercher Kantonalbank and ETF Securities Ltd. Holdings
in the SPDR Gold Trust, the biggest exchange-traded fund backed
by bullion, are up 42 percent this year. Hedge funds and other
large speculators hold their most-bullish position ever in gold
futures. So-called net-long positions, or bets prices will rise,
increased by 6 percent to 253,955 contracts in the week ended
Oct. 13, according to the Commodity Futures Trading Commission.

Gold Producers

The Philadelphia Stock Exchange Gold & Silver Index jumped
43 percent this year, as Phoenix-based Freeport-McMoRan Copper &
Gold Inc. tripled. Toronto-based Barrick Gold Corp., the world’s
largest producer, fell 10 percent. Barrick said Sept. 8 it will
record $5.6 billion in third-quarter costs to eliminate fixed-
price contracts as the company bets gold’s value will climb.

At Jersey, Channel Islands-based GoldMoney.com, which held
$759 million of gold and silver for investors as of Sept. 30,
founder James Turk said bullion can climb eightfold based on the
historical relationship between the metal and the Dow Jones
Industrial Average. The Dow is up 10-fold since January 1980.

Gold and the Dow, which has gained 14 percent this year to
9,995.91, were at about the same level during the Great
Depression and the early 1980s, he said. On Jan. 21, 1980, as
gold futures surged to $873, the Dow slipped to 946.25.

“The dollar is constantly being debased and inflated,”
Turk said. “By 2013, gold is going to be at $8,000 and the Dow
will be at 8,000.”

Gold-Dollar Link

Deutsche Bank said early this month that the dollar will
fall to $1.60 per euro next year, a drop of 7.3 percent from
last week, because of “rising fiscal deficits and loose
monetary policy.”

Gold has moved in the opposite direction of the dollar over
most of the past decade. The metal’s correlation coefficient to
the U.S. Dollar Index is minus 0.8539, Bloomberg data show. A
correlation of minus 1 indicates two assets move inversely to
each other, while a 1 would show they move in tandem. A reading
of zero shows no correlation.

Philip Gotthelf, the president of Equidex Brokerage Group
Inc. in Closter, New Jersey, says he expects gold to trade at
$1,250 by year-end.

“Gold has been pushing higher because it’s no longer just
a hedge against commodity inflation, it’s also a hedge against a
change in world-monetary standards.”

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