Money and Metals

Gold markets ran into a technical wall today. "Gold futures fell by $5 an ounce Tuesday, and silver futures gave back more than 1%, with both metals relinquishing most of the gains from the previous session after failing to reach key price levels. 'Gold and silver are having a hard time with psychological resistance levels at $600 and $12, respectively,' said Dale Doelling, at Trends In Commodities. 'The recent bounce in prices may end up being just that, a temporary bounce,' Doelling said. 'Only time will tell.'"

"Gold for December delivery closed down 0.8% at $593.50 an ounce on the New York Mercantile Exchange, after dipping to a low of $589. The contract traded as high as $599.80 early on in Tuesday's session."

"December silver fell by 13 cents to close at $11.78 an ounce after a high of $11.98. It climbed 23 cents in the previous session. January platinum lost $8.30 to close at $1,083 and December palladium closed down $4.95 at $319.60 an ounce."

"Despite recent gains, however, 'gold still faces plenty of scaled up resistance with chart congestion likely to be heavy' between the 200-day moving average of $599.70 and $608,' said James Moore, an analyst at TheBullionDesk.com."

"Reports that North Korea is about to set off a second atomic device, oil prices around $60 and a 'markedly softer U.S. dollar should all have bolstered gold prices to well over $600 by now,' said Jon Nadler, at bullion dealers Kitco.com. 'On the other hand, imploding PPI figures prompted by the collapse in energy costs and a sharp contraction in U.S. industrial production have traders worried that while inflation may not be an imminent threat, stagnation (or worse) surely could be,' he said."

"The dollar fell Tuesday, touching a more than one-week low against the yen, after a report showed the U.S. industrial sector slowed more-than-forecast last month and as traders continued to digest the Russian central bank's recent decision to diversify its foreign-exchange reserves."

"The Canadian dollar fell to the lowest since July after the Bank of Canada kept its benchmark interest rate unchanged at 4.25 percent and cut its economic growth forecast."

"The currency's decline deepened after it weakened past the C$1.14 level, traders said. The central bank reduced its growth estimate for this year to 2.8 percent from a 3.2 percent prediction in July. The prospect of slower growth means the central bank is more likely to refrain from lifting borrowing costs further, traders said."

"'We're in a bearish trend for the Canadian dollar, at least through the end of this year,' said Linda Jespersen, managing director of currency trading at National Financial Bank in Toronto. 'There are a lot of motivated sellers for the currency at the C$1.1400 level.'"

"Canada's dollar has fallen about 4 percent since reaching the 28-year high. Crude oil fell for the first time in four days on forecasts that U.S. inventories rose and skepticism OPEC will cut production by 1 million barrels a day. Prices have declined about 8 percent in the past year."

"The U.S. dollar was barely changed against the euro Tuesday as new inflation data from the world's largest economy provided a mixed picture. U.S. Labor Department data on Tuesday showed that wholesale inflation plunged by the largest amount in more than three years in September, thanks to a record drop in the cost of gasoline."

"However, core inflation, excluding energy and food, jumped by 0.6 percent in September, well above economists' expectations of a 0.2 percent increase."

"Economic data are being watched closely for clues about the U.S. Federal Reserve's future course on interest rates. Another key inflation gauge, the U.S. consumer price index, follows on Wednesday."