Gold Futures Fluctuate
Source: Bloomberg, Pham-Duy Nguyen (8/30/10)
"Gold is sitting in the middle of a trading range."
U.S. stocks fell, extending three weeks of losses, after slower-than-forecast growth in personal incomes added to concern that the economic rebound is slowing. Before today, gold gained 13% this year, reaching a record $1,266.50/oz. in June.
"Gold is sitting in the middle of a trading range," said Frank McGhee, head dealer at Integrated Brokerage Services in Chicago. "Gold can benefit from a selloff in equities on fear, or it can rally on expectations of quantitative easing. The downside is really short term."
Gold futures for December delivery fell $0.50 to $1,237.40/oz. at 11:25 a.m. on the Comex in New York. Earlier, the price fell and rose as much as 0.2%.
Federal Reserve Chairman Ben Bernanke said on Aug. 27 that the central bank "will do all it can" to ensure a recovery. The economy grew at 1.6% in the second quarter, less than the government predicted last month.
The Fed has kept the main interest rate between 0% and 0.25% since December 2008 to revive the economy. The central bank has also purchased mortgage-backed securities to help push down mortgage rates to support the housing market.
"Amid all this negativity on the housing market, the economy and, thus, the stock market, we find it to be an easy argument to make that gold prices will benefit due to competition with these other assets," said MF Global Analyst Tom Pawlicki.
Silver futures for December rose 0.2% to $19.11/oz. on the Comex.
Platinum futures for October delivery fell $3.10, or 0.2%, to $1,533.90/oz. on the New York Mercantile Exchange
Palladium futures for December delivery lost $3.85, or 0.8%, to $500.80/oz.