Precious Metals Climb
weakened U.S. dollar and an expected Federal
Reserve rate cut on Wednesday helped shore up
New York silver, gold and platinum futures. Each
enjoyed gains of 11.5 percent, 2.0 percent and
1.0 percent, respectively.
After trading hours, the Fed cut its key
interest rate to 1 percent, which was inline
with most analysts’ expectations. The cut of 50
basis points is another attempt to combat the
ongoing crisis in the credit markets.
Lower rates can help feed inflation and
depreciate the U.S. dollar, which is normally
bullish for gold in the long haul. However, the
yellow metal maintained its recent unpredictable
pattern and lost much of its earlier morning
December oil surged $4.77, or 7.6 percent, to
close to $67.50 a barrel.
December silver surged $1.02 to end at $9.81 an
January platinum gained $7.80 to settle at
$816.60 an ounce.
Gold for December climbed $15.50 to close to
$755 an ounce. The yellow metal has fallen in
ten out of the past fourteen sessions since
closing above $900 an ounce on October 8.
"The aggressive but totally unsurprising Fed
rate cut came and went this afternoon. Stocks
headed lower, gold lost $25 of its prior robust
$30 gain for the day, and the dollar continued
at pre-announcement levels," said senior analyst
Jon Nadler at Kitco Bullion Dealers.
"Clear direction is still lacking in all of
these markets, and conditions will pivot on a
single news item, or someone’s mood souring for
no apparent reason," added Nadler.
Gold typically follows oil’s direction and moves
opposite to the U.S. dollar, as a weakened
dollar encourages investors to buy gold, also
normally considered a hedge or safe-haven during
times of high inflation and economic