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Gold imports cause surge in Thailand''s trade deficit with Australia
Gold Prices Drop as Fewer
Jobless Claims Boost Dollar
By Pham-Duy Nguyen
Bloomberg News Service
Thursday, March 17, 2005
http://www.bloomberg.com/apps/news?
pid=10000081&sid=aHTnmfh4s4GE&refer=australia
SEATTLE -- Gold prices in New York fell after a report showed fewer
Americans filed for unemployment benefits last week, boosting the
dollar and eroding the appeal of the precious metal as an
alternative investment.
Initial applications declined to 318,000 in the week ended March 12
after surging to 328,000, the Labor Department said today in
Washington. Fewer claims indicate a strengthening economy and may
bolster the case for higher interest rates and purchases of dollar-
denominated assets, analysts said.
"Gold has no returns," said Ron Goodis, retail trade director at
Equidex Brokerage Group Inc. in Closter, New Jersey. "As interest
rates go higher, holding gold becomes less attractive, so that"s
going to cause gold to head back down."
Gold futures for April delivery fell $5.30, or 1.2 percent, to
$438.90 an ounce at 11:32 a.m. on the Comex division of the New York
Mercantile Exchange. A futures contract is an obligation to sell or
buy a commodity at a set price by a specific date.
Gold also weakened after an index of leading U.S. economic
indicators increased in February. The New York-based Conference
Board said today its gauge of the likely performance of the economy
over the next three to six months rose 0.1 percent after a 0.3
percent decline in January.
Fewer jobless claims and higher stock prices helped lift the index,
economists said. A rise in interest rates and a drop in the average
workweek restrained the gauge, which suggests the economy will keep
growing in the months ahead.
"An increase would normally be a drag on gold," Goodis said.
Gold may continue to weaken if a strengthening economy and higher
oil prices give the U.S. Federal Reserve more ammunition to raise
interest rates to stem inflation, traders said.
Crude oil for April delivery rose 34 cents, or 0.6 percent, to
$56.80 a barrel on the Nymex. The price earlier reached $57.50, the
highest since futures debuted in March 1983. Prices are 49 percent
higher than a year ago.
U.S. Federal Reserve policy makers will lift their benchmark rate by
a quarter point to 2.75 percent on March 22, according to the median
forecast of economists polled by Bloomberg. An increase would widen
the gap with the euro region, where the European Central Bank has
kept its rate at 2 percent since 2003.
"The Fed is so far behind the curve so they'll have to start raising
interest rates," said James Turk, founder of Channel Islands-based
Goldmoney.com, which stores about $40 million of gold for owners in
102 countries.
Gold prices may test $442 an ounce and reach $450 by the end of the
month, Turk said. "A lot of short-term traders dumped today," when
gold failed to stay above $442, Turk said. "Gold has a lot of
catching up to do with other commodities. Gold has to be considered
the best way to play the commodities boom at the moment."
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http://www.a1-guide-to-gold-investments.com/euro-vs-dollar.html
http://www.investmentrarities.com
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Ted Butler silver commentary archive:
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----------------------------------------------------
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