Gold Prices Recover After Wednesday's Bloodbath
Gold for April delivery was rising $6.40 to $1,717.70 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,726.40 and as low as $1,695.10 an ounce, while the spot price was gaining $19.80, according to Kitco's gold index.
Gold market analysts spent much of the morning taking stock of Wednesday's selloff."The massacre was attributed to a host of different reasons -- from month end book squaring, to the positive PMI numbers to Bernanke's suggestion that ultra loose monetary policies may soon come to an end," read a report from bullion dealer GoldCore. "None of these reasons would justify the scale of the massive sell offs seen in gold and silver yesterday. Gold and silver markets saw massive sell orders from large institutional sources -- as only large institutions selling could have caused a price falls of the magnitude seen yesterday. There were highly speculative unsourced rumors of an Asian fund selling gold and rumors of a single bullion sale of 31 tonnes or some 1 million ounces by an unnamed seller." Regardless of the triggers, investors were examining gold in a new light on Thursday. "Yesterday's turbulence will take some digestion and absorption," said George Gero, precious metals strategist with RBC Wealth Management. "Central Bankers usually do not favor gold, tend to talk it down, so today's jobless claims figures were once again helpful. Less quantitative easing-3 talk, and so gold buyers are becoming cautious."
"Precious metals opened with gains this morning as market participants were hard at work trying to repair at least part of the substantial damage that was incurred on Wednesday," said Jon Nadler, senior metals analyst with Kitco Metals. "A knee-jerk reaction was to be expected after such a rout, but there is still apprehension in the pits related to margin calls, a change in open interest, and the upcoming 'slow' seasonal period in gold (extending up to May/June)." Mixed U.S. economic data was also keeping prices in check. Initial jobless claims fell 2,000 to 351,000 during the week ended Feb. 25 from a revised 353,000 in the previous week, according to a Labor Department report. Claims data met analysts' expectations according to Thomson Reuters. The four-week moving average fell 5,500 to 354,000 from a revised 359,500. The Institute for Supply Management reported that its manufacturing index dropped to 52.4 in February. While the data showed that manufacturing is still expanding, it missed expectations for a reading of 54.5, according to economists polled by Thomson Reuters. The index came in at 54.1 in the prior month. The Commerce Department's reading on construction spending dropped 0.1% in January for the first time in six months. Economists polled by Thomson Reuters expected it to tick 1% higher, adding to a 1.5% rise the prior month. Personal incomes rose 0.3% to $37.4 billion in January according to a Commerce Department report, falling just short of expectations of a 0.4% rise according to analysts polled by Thomson Reuters. Personal spending rose 0.2% to $23.2 billion for the month, again falling short of expectations of a 0.3% increase. Mining stocks were modestly higher Thursday. Among the biggest gainers were Jaguar Mining (JAG), up 2.9% to $6.34, and Goldcorp (GG), adding 2% to $49.50. First Majestic Silver (AG), was gaining 2% to $20.87, and Freeport-McMoRan (FCX) was up 1.9% to $43.37. -- Written by Ross Tucker in New York.
>To contact the writer of this article, click here: Ross Tucker. >To follow the writer on Twitter, go to http://twitter.com/rosstucker. >To submit a news tip, send an email to: email@example.com.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV