Skip to main content
Publish date:

No Nukes for Gold Traders

Gold doesn't get much lift from North Korea's actions.

North Korea's claim that it successfully tested a nuclear weapon didn't ignite a rush into gold on Monday.

Contracts for December delivery of bullion moved up $6 to close at $582.80 an ounce on the Comex division of the New York Mercantile Exchange. But in after-hours trading, the price pulled back.

Shares of the bullion exchange-traded funds,

iShares Comex Gold Trust

(IAU) - Get iShares Gold Trust Report

and

streetTRACKS Gold Shares

(GLD) - Get SPDR Gold Trust Report

, were ahead less than 1% by mid-afternoon, off their highs for the day.

The lackluster rally in the gold market was something of a disappointment to observers, who had expected a more spectacular move. When traders got to work Monday, there was an expectation that nervous investors would flock to gold.

"What do investors want?" asks Jon Nadler, an analyst at the Montreal-based bullion dealer Kitco. "Invasions and above-ground explosions?"

He described the session's price move as a "dead cat bounce" that was indicative of an "autumn of disappointment" for the gold market. Investors, he says, had been expecting seasonally strong demand to take bullion prices higher.

The dollar's reaction was mixed after the alleged bomb test, which U.S. authorities are still trying to confirm. The dollar was buying 119.11 yen, up a touch compared with 119.01 yen Friday. It was trading at $1.2603 against the euro, down from $1.2595 previously.

Among the miners, the

Amex Gold Bugs Index

was gaining a hair, with a rally by

TheStreet Recommends

Freeport-McMoRan Copper & Gold

(FCX) - Get Freeport-McMoRan, Inc. (FCX) Report

offsetting losses by

Hecla Mining

(HL) - Get Hecla Mining Company Report

and

Kinross Gold

(KGC) - Get Kinross Gold Corporation Report

.

Silver prices also jumped, taking the lead from gold, with Comex December-dated contracts closing up 24.5 cents at $11.42 an ounce.

iShares Silver Trust

(SLV) - Get iShares Silver Trust Report

was gaining 1.7% recently, in line with the metal.

In base metals, Comex copper December contracts gained 2.45 cents to close $3.413 a pound, buoyed by the more general flight to metals.

Elsewhere, the world's biggest base metals futures market, the London Metal Exchange, was said to be considering a takeover bid from the

Chicago Board of Trade

(BOT)

, according to London's

Observer

newspaper on Sunday. The LME shot back, telling

Reuters

that the report was premature. Separately, Credit Suisse downgraded the stock to underperform from neutral.

Investors weren't taking any chances, and shares of the exchange were losing 2.4% by mid-afternoon.

Among the major miners,

Rio Tinto

(RTP) - Get REINVENT TECHNOLOGY PARTNERS CLASS A Report

was gaining 2.8%, while

Companhia Vale do Rio Doce

(RIO) - Get Rio Tinto plc Sponsored ADR Report

was lifting 3.4%.