Monday, November 07, 2005


Gold Waivers In Front Of 'Volatility'

Market Watch reports that gold didn't hold the $460 level. "After closing out last week with a loss of nearly $17 an ounce, gold futures traded little changed Monday morning, holding ground near $458 an ounce. 'Scaled-down buying from the physical sector will slow the metal's progress,' said James Moore. 'There is potential for gold to dip to $445 in the short-term before recovering towards year-end,' he said in a note to clients."

"Silver and copper futures were among the other losers in the metals market Monday. December copper fell to $1.841 a pound, down 0.5 cent after tapping a lifetime high of $1.854 a pound on Friday. December silver fell 9.8 cents to trade at $7.48 an ounce."

"'With gold still vulnerable to further pressure in the coming sessions silver will remain in a volatile mood,' said Moore, adding that 'support should continue to be found at $7.40.'"

"Other metals on the exchanged headed higher. The January contract for platinum was up 70 cents at $935.50 an ounce and December palladium traded at $229 an ounce, up $2.65. Tacking a look at the bigger picture, the stronger dollar may add some downward pressure to the metals, said William Adams."

"Merrill Lynch & Co.'s Chief North American Economist David Rosenberg said gold may offer an alternative to investors as U.S. capital markets head for a 'year of heightened volatility.'

"'In the year of dollar weakness, gold will be a good place to be as it stabilizes your portfolio,' Rosenberg told investors in Singapore today. 'There is a 30 percent chance for a recession. If growth gets weak enough to get the employment up, then it's going to feel like a classic recession.' "

"A cooling housing market and regulatory moves to curtail a credit boom may curb growth in consumer spending, leading to slowdown in the U.S. economy, Rosenberg said. 'Credit excesses have gone out of control,' Rosenberg said. 'We are going to be seeing much different consumers, not just next year, but next four to five years.'"

"The U.S. savings rate has shrunk as households are spending their wage-based income on expectations that house prices will continue to increase, he said. 'Forty percent of growth in consumer spending in the past year has come from a drawdown in savings rate to negative territory,' he said. 'If you think that consumer spending is predicated on organic income and employment gains, forget it.'"

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