Thursday, October 20, 2005


Gold, Dollar Pull Back, Inflation Roars

Things are moving quickly in the metals markets. "Gold futures closed Thursday at their lowest level in five weeks, tallying a three-session loss of over $13 an ounce. 'Gold has more downside work to do and has the potential, short-target, to dip to $445,' James Moore said. 'Physical buying from India is likely to be very strong below $450 and should prevent gold from falling much lower.'"

"Gold for December delivery rose as high as $467.30 an ounce on the New York Mercantile Exchange, before reversing course to close down $2.60 at $463.20. Prices lost $8.80 on Wednesday and fell $2 on Tuesday. 'Certainly the gold market was overbought and vulnerable,' said Nell Sloane."

"She's not convinced that 'the market is poised to resume the rally right away, especially if the oil market continues to weaken and the outlook for the world economy remains mostly mixed.'"

"The US Dollar fell against other major currencies in European trading Thursday. The euro was quoted at $1.1981, up from $1.1976 on Wednesday. Later, in midday New York trading, the euro obtained $1.1982. Other dollar rates included 115.42 Japanese yen, down from 115.47; 1.2926 Swiss francs, down from 1.2962; and 1.1725 Canadian dollars, down from 1.1743."

"Prices continued to surge in October, with the key prices paid index jumping to 67.6 from 52.7, reaching its highest level since November 1980, according to the Philadelphia Fed. The sharp rise in both prices paid and prices received..suggested inflationary pressures are indeed mounting and the Federal Reserve will have to make good on its vow to curb rising prices."

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