Gold, silver and other commodities rebounded Wednesday as investors brushed off China’s surprise rate hike which rattled the markets on Tuesday.
As the U.S. dollar posted its worst day in more than three months, gold advanced 0.6 percent to reclaim a small portion of its 2.6 percent prior day loss. Platinum rose 0.6 percent as well, while silver gained 0.4 percent and palladium rallied 2.1 percent.
In other markets, crude oil rose the most in five weeks to close toward $82 a barrel while U.S. stocks erased much of their earlier losses. The Dow gained 1.18 percent, the S&P gained added 1.05 percent, and the Nasdaq rose 0.84 percent.
New York precious metals closing prices follow:
Gold futures for December delivery rose $8.20 to $1,344.20 an ounce on the Comex in New York. It ranged from $1,331.10 to $1,348.10.
December silver gained 8.4 cents to close at $23.864 an ounce. It ranged between $23.290 and $23.920.
Platinum for January delivery advanced $9.70 to finish at $1,687.30 an ounce. It ranged from $1,660.00 to $1,691.70.
Palladium for December delivery jumped $12.20 to $590.65 an ounce. It ranged between $569.20 and $591.00.
In notable bullion quotes of the day:
"People still don’t have a lot of faith in the dollar," Matthew Zeman, a metal trader at LaSalle Futures Group in Chicago, said and was quoted on Bloomberg. "We see the dollar giving back a vast majority of its gains yesterday. For the foreseeable future, the short-dollar long-gold trade remains intact."
"China’s rate hike (on Tuesday) had profound effects on the commodity (and other) markets on Tuesday. Gold prices fell by almost 3% in their worst slump since July, while an equally steep decline took place in crude oil values," noted Jon Nadler, senior analyst at Kitco Metals, Inc. "The quick slicing of prices underscored but one undeniable feature of recent market activity; that prices had been pushed into extremes on mainly one speculation, and by mainly one species of participant: the hedge funds."
In PM London bullion prices, the benchmark gold Fix was unchanged at $1,339.00 an ounce. Silver was $23.710 an ounce for a drop of 55 cents. Platinum fell $2.00 to $1,670.00 an ounce. Palladium was $581.00 an ounce, rising $10.00.
In coin news, U.S. Mint bullion sales were calm on Wednesday. The only gainer was the one-ounce American Gold Eagle, adding 5,000. They climbed 3,500 on Tuesday. The following are current October coin sales figures as published by the United States Mint.
|U.S. Mint 2010 Bullion Coin Sales|
|American Eagle Gold Coin (1 oz)||65,000||952,500|
|American Eagle Gold Coin (1/2 oz)||3,000||39,000|
|American Eagle Gold Coin (1/4 oz)||0||54,000|
|American Eagle Gold Coin (1/10 oz)||25,000||380,000|
|American Buffalo Gold Coin (1 oz)||Sold Out||209,000|
|American Eagle Silver (1 oz)||2,000,000||27,480,500|
Oil and gasoline prices
New York oil prices benefited from the falling dollar and the weekly Energy Information Administration (EIA) report showing a smaller-than-expected increase in crude inventories. Crude futures for November advanced $2.28, or 2.8 percent, to $81.77 a barrel after dropping $3.59, or 4.3 percent, on Tuesday.
"The market reaction to the Chinese interest rate rise doesn’t appear to have legs," John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund focusing on energy, was cited on Bloomberg. "It’s back to reality, with the dollar on the decline once again in advance of the coming moves by the Federal Reserve."
The national average for regular unleaded gasoline rose two-tenths of a cent to $2.831 a gallon, according to AAA fuel data. The price is 1.1 cents more than last week, 10.5 cents higher than a month back, and 25.4 cents above the price from a year ago.
U.S. stocks rose sharply on Wednesday after falling just as sharply on Tuesday.
"People are getting confident that earnings are going to be good this year," Maris Ogg, president of Tower Bridge Advisors, said and was quoted on MarketWatch. "Maybe not to the level where we have 75% or 80% of companies beating expectations, but people are more confident the economy is on a more even keel."
The Dow Jones industrial average advanced 129.35 points to 11,107.97. The S&P 500 Index climbed 12.27 points to 1,178.17. The Nasdaq Composite Index added 20.44 points to 2,457.39.