Gold futures mark two-session loss
Prices fail to touch $670 as traders digest recent news
By Myra P. Saefong, MarketWatch
Last Update: 4:14 PM ET Aug 21, 2007
marketwatch.com
SAN FRANCISCO (MarketWatch) -- Gold futures closed modestly lower Tuesday for a second straight session as traders sorted out developments related to the U.S. economy and the financial markets.
"Gold is standing its ground well after the horrendous financial tsunami that swept through the credit markets last week," said Julian Phillips, an analyst at GoldForecaster.com.
"All is not over on that front, we believe," he said in emailed comments. "It all depends on whether confidence was calmed or crippled. After all, the problems lay with the investors not investments."
Gold for December delivery fell by 30 cents to close at $666.20 an ounce on the New York Mercantile Exchange. It traded as high as $669.10 earlier, after losing 30 cents on Monday.
In the backdrop, U.S. stocks were mixed Tuesday amid conflicting signals on whether the Federal Reserve would move again to address the address the credit crunch roiling the financial markets.
"Jitters over the credit markets persist, and the latest news reports that Deutsche Bank borrowed from the Fed's discount window and that U.S. Capital One Financial Corp. is shutting down a wholesale mortgage unit ... are keeping investors on edge," said Mark O'Byrne, director of GoldandSilverInvestments.com.
"There are increasing signs that the problems in the financial economy are mirrored by a deteriorating real economy with news that foreclosures rose sharply in July," he said in a note to clients. "Given that the much hoped for 'soft landing' is not materializing, safe-haven demand for gold will likely emerge to provide a fundamental support to gold in the short term, and lead to higher prices in the medium and long term."
Meanwhile, other metals prices followed gold lower. September silver fell 22.5 cents, or 1.9%, to end at $11.51 an ounce. September palladium closed 2.6% lower at $323.50 an ounce, and September copper finished at $3.15 a pound, down 0.95 cent.
Platinum was the exception, with October futures climbing $4 to close at $1,251.40 an ounce.
Inventories and indexes
Gold warehouse inventories fell 5,570 troy ounces to stand at 7.09 million troy ounces as of late Monday, and copper supplies were down 347 short tons at 20,897, according to Nymex data. Silver supplies were unchanged at 134.3 million troy ounces as of late Friday.
Indexes tracking mining and metals stocks closed higher Tuesday for second session in a row.
The Philadelphia Gold and Silver Index (XAU) rose by 0.7% to close at 132.89 points. The CBOE Gold Index (GOX) closed at 133.11 points and the Amex Gold Bugs Index (HUI) ended at 314.10 points, with both up 0.5% for the session.
As for sector exchange-traded funds, the StreetTracks Gold Trust ETF (GLD) closed down 0.1% at $65.08. The iShares Silver Trust ETF (SLV) fell 2.2% to close at $114.75, while the Market Vectors-Gold Miners ETF (GDX) fell by 0.1% to end at $35.75.
Myra P. Saefong is MarketWatch's assistant markets editor, based in San Francisco. |
