fast track exploration - Canada & Mexico
Promontorio Silver Project - mineral rich Sierra Madre trend of Mexico.

AGORACOM News Flash

AGORACOM CONFERENCE UPDATE

  • 12 More Companies Added To Schedule For Dec 3 & 4. (See Schedule)
  • Keynote Speakers Include Peter Grandich, Eric Coffin (See Speakers)
  • Workshop Presentations Added To Thursday Schedule
  • Investors from over 45 Countries Have Visited
  • Conference Begins 2 Weeks From Today!

Looking forward to seeing all of you there gang.  Registration is free for investors.  AGORACOM Members register with just one click.  Non-members takes less than 60 seconds.  Register here (see form on right hand side)

 

Message: Metals - Gold hits day high after poor U.S. data; focus shifts to rate cut

Hornswoggle
Rank: [?]
Vice President
Points: [?]
1058
Rating: [?]
Votes: 26 Score: 4.2
  • Currently 4.2/5 Stars.
Did you know? You can earn activity points by filling your profile with information about yourself (what city you live in, your favorite team, blogs etc.)

Metals - Gold hits day high after poor U.S. data; focus shifts to rate cut

posted on Apr 04, 08 07:08AM

LONDON (Thomson Financial) - Gold hit a day high after U.S. non farm payrolls data re-ignited fears of recession and battered the dollar but bullion failed to rally as the dollar later recovered.

The U.S. dollar's knee jerk reaction was to fall sharply after dismal U.S. jobs data pointed to recessionary conditions in the economy and raised the prospects of further cuts in interest rates by the Federal Reserve.

Players are now assessing the likelihood of another U.S. interest rate cut that would most likely weaken the dollar further and boost gold prices.

'Participants will weigh the odds of an end of April Fed rate cut against the demand contraction implications of a US economy,' said Kitco analyst Jon Nadler.

The payroll figures, which are closely monitored by the market, showed the economy lost 80,000 jobs in March, well below expectations for a much smaller drop of 50,000 and the biggest drop in five years.

This is the third consecutive month that the U.S. economy has shed jobs, the first time this has happened since June 2003, causing the unemployment rate to jump to 5.1 percent from 4.8 percent in February.

But, Martin Slaney, head of spread betting at GFT Global markets said: 'The market was braced for bad news and seems to be holding up well.

'This certainly ups the odds of another fifty basis point cut at the next Fed meeting so that is providing us with some support. The key issue will be whether we start to see the cuts in the Fed Funds rate filter through to the interbank money markets; until it does the tightness in credit will remain.'

At 2.11 p.m., spot gold was trading at $905.00 an ounce against $905.30 in late New York trades yesterday.

Looking ahead, players will track dollar's movements and use any key economic data to weigh the gravity of the credit crisis.

Gold moves in the opposite direction to the dollar as it is seen as an alternative asset. Bullion also trades counter to crumbling equity markets, pressured by economic weakness, as it is seen as a safe store of value.

'Gold prices were buoyed by investor interest and this is likely to remain the key price determinant this year,' said Barclays (nyse: BCS - news - people ) Capital analysts. 'External factors such as inflationary and broader economic concerns, geopolitical tensions and Fed rate easing are likely to drive prices to retest $1000/oz,' said Barclays Capital analysts.

In other precious metals, silver was trading up at $17.43 an ounce against $17.41 in late New York trades Thursday.

Platinum was higher at $1,989 an ounce against $1,987, while its sister metal palladium was at $433 an ounce against $437.

 

anealla.safdar@thomson.com

New Message

Please login to post a reply

AGORACOM Quick Tips

AGORACOM Twitter. Follow our small but powerful market tips .. Follow and Prosper

President's D.D.

New feature: Hub Presidents can add important links here.