Gold Sees Modest Rally
Gold prices were rallying Friday on a combination of more evidence of a U.S. economic slowdown and a banking crisis in the U.K.
December-dated bullion contracts were tacking on $6.10 at $724 an ounce in recent New York futures market action.
The bullion exchange-traded funds, which hold inventories of the metal, were rising also, with
streetTracks Gold Shares
(GLD) - Get SPDR Gold Shares ETF Report
and
iShares Comex Gold Trust
(IAU) - Get iShares Gold Trust Report
both up about 0.9% in recent action.
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The Commerce Department reported worse-than-expected retail sales for August, augmenting the growing picture of an ailing U.S. economy.
"The weak economic data only adds to the case for an interest rate cut in the U.S.," says Jon Nadler an analyst at Montreal bullion dealer Kitco. That in turn would weaken the dollar, so boosting the value of dollar-denominated assets such as the precious metals.
Also aiding the bullish case for gold was news out of the U.K. that Britain's version of the
Federal Reserve
, the Bank of England, would help out troubled lender
Northern Rock
. Still the firm's customers weren't too impressed, with many scrambling to withdraw their savings in scenes reminiscent of a 1930s style bank run.
"You have images of people lined up in the street," adds Nadler. "That's definitely what gold bugs love, they thrive on crisis."
Elsewhere in commodities, copper prices were edging down a penny at $3.39 a pound, while silver prices were up 4 cents at $12.72 an ounce.
As for the agricultural segment, wheat prices were losing about 1% at $8.36 a bushel. Frozen concentrated orange juice contracts were off a penny at $1.22 a pound.
