Money and Metals

The Associated Press reports on currencies. "The dollar traded mostly lower against the other major currencies Tuesday as investors sweated over the troubled subprime mortgage sector and U.S. retail sales data came in short of expectations. The 13-nation euro bought $1.3196 in late afternoon trading, up from $1.3187 late Monday. The British pound fell to $1.9303 from $1.9318, while the yen dropped to 116.52 yen from 117.61 yen."

"The Mortgage Bankers Association reported that mortgage delinquencies and foreclosures rose in the last quarter of 2006, indicating widespread problems in the industry. The mortgage troubles sent the Dow down 242.66, or 1.97 percent, to 12,075.96, according to preliminary calculations. The index is now down more than 710 points, or 5 percent, from its record close reached Feb. 20."

"The dollar's weakness against the yen renewed worries about traders unwinding their yen 'carry trades,' or pulling money out of high-yielding dollar assets bought with the low-yielding yen, said Michael Woolfolk, senior currency strategist at the Bank of New York."

"Also dragging down the dollar was a Commerce Department report that showed U.S. retail sales inched up by only 0.1 percent in February amid bad winter weather, well short of economists' forecast of a 0.3 percent rise."

From MarketWatch. "Gold futures closed lower Tuesday after earlier strength stalled at the $650-an ounce level, stretching the precious metal's losing streak to three sessions as traders eyed moves in the U.S. dollar and oil in the hope of predicting the precious metal's next direction."

"'Gold and the rest of the precious metals have seen another day of directionless two-way trade as players seem torn between looking to oil, the dollar and equities for direction,' James Moore, an analyst at TheBullionDesk.com said in afternoon comments."

"Gold for April delivery fell 90 cents to close at $649.40 an ounce on the New York Mercantile Exchange. The contract has now lost $6.10, or 0.9%, from Thursday's closing level of $655.50."

"'Gold's reversal momentum from last week has waned and is finding difficulty moving past the resistance in the mid to upper $650s,' said Peter Spina, chief investment strategist at GoldSeek.com. 'A bit of cautiousness has entered after the recent volatility. Investors are looking for direction; consolidation is the current market theme,' he said."

"In the short term, 'direction is still unclear and gold may have to weather further weakness, particularly with sliding energy costs reducing inflationary concerns, before reaching a level at which investors and speculators are happy to re-establish positions in the market,' said James Moore, an analyst at TheBullionDesk.com."

"'A little of the apprehension surrounding the direction of equities values has also resurfaced among bullion investors,' analyst Jon Nadler said. 'Stories of a hedge fund in difficulty added to the cautious tone across several trading markets.'"

"The gold-price target that 'needs to be conquered is in the area of $665 to $670,' he said. But support for prices remains 'decent near $645.'"

"Against this backdrop, most metals prices lost ground. May silver fell 12.5 cents to close at $12.96 an ounce while June palladium shed $2 to close at $354 an ounce, but sister metal platinum saw its April contract tack on $9.80 to close at $1,223.60 an ounce."

From Bloomberg. "Gold prices fell in New York for the third session in a row as declines in global equity markets revived concern that investors will sell commodities to cover losses."

"Gold has dropped 5.9 percent since Feb. 27, when Chinese stocks tumbled the most in 10 years and the selling spread to Japan, the U.S. and Europe. 'Gold's got a little more weakness to come,' said James Moore. 'Investors had their fingers burned in a lot of areas, and they're sort of trading cautiously for now.'"