Precious Metals Drop with Oil, as Inflation News Calms

by CoinNews.net on August 22, 2008 · 1 comment

New York silver, gold and platinum lost a part of their recent gains Friday, as oil tumbled and the U.S. dollar and stocks rallied with Federal Reserve Chairman Ben Bernanke’s calming inflation comments.

Bullion update ... After three straight session gains, October crude-oil fell sharply by 5.4% or $6.59 to close to $114.59 a barrel. Its one-day percentage loss was the biggest since 2004.

Silver for September dropped 15 cents to close to $13.48 an ounce.

October platinum lost $17.60 to end at $1,451.20 an ounce — a 1.2% decrease.

December gold closed down $5.50 to $833.50 an ounce.

“Bouts of intra-day volatility continued to buffet the markets, with sharp drops and equally sharp spikes punctuating the few periods of relative," said senior analyst Jon Nadler at Kitco Bullion Dealers.

"Players digested the apparently soothing words offered by Mr. Bernanke to jittery investors and decided that there was no imminent reason to back up the truck on commodities," continued Nadler.

Federal Reserve Chairman Ben Bernanke helped settle markets Friday with his inflation message.

"The recent decline in commodity prices, as well as the increased stability of the dollar, has been encouraging.

If not reversed, these developments, together with a pace of growth that is likely to fall short of potential for a time, should lead inflation to moderate later this year and next year."

Gold typically follows oil and moves opposite to the dollar, as a weakened dollar encourages investors to buy gold, also considered a hedge during times of high inflation and economic uncertainty.

Bullion spots are available on the CoinNews page, Live Silver, Gold & Platinum Spots. Check how the value of the US dollar has changed over time on the CoinNews page, Inflation Calculator.

{ 1 comment… read it below or add one }

silverlover May 11, 2014 at 12:57 pm

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