Reply : Gold, Silver Fall as Demand for Hedge Against Inflation Slows By Halia Pavliva Jan. 16 (Bloomberg) -- Gold futures tumbled the most in almost nine weeks after prospects for an emergency interest-rate cut by the Federal Reserve faded, reducing the appeal of the precious metal as hedge against inflation. Silver also declined. Speculation about a rate cut, prompted by a 0.4 percent drop in U.S. retail sales last month, helped gold jump to a record yesterday. The Fed is now expected to cut borrowing costs at its meeting on Jan. 30. Energy prices dropped for a second day, and the dollar rebounded against the euro, pushing the metal lower today. ``The markets were expecting an emergency rate cut yesterday,'' said Ralph Preston, a senior market analyst at Heritage West Financial Inc. in San Diego. ``The reason for the reversal is that we didn't get that rate cut.'' Gold futures for February delivery fell $20.60, or 2.3 percent, to $882 an ounce on the Comex division of the New York Mercantile Exchange. The percentage decline was the biggest since Nov. 15. The price reached $916.10 yesterday, the highest ever for a most-active contract. Silver futures for March delivery dropped 40.5 cents, or 2.5 percent, to $15.895 an ounce. The percentage drop was the most in a month. The metal gained 15 percent last year. The dollar rose as much as 1.4 percent against the euro on speculation the European Central Bank will join the Fed in cutting interest rates this year. ECB council member Yves Mersch, who is also governor of Luxembourg's central bank, cited ``downside risks'' to the region's economic growth. `Rate-Cut Mode' ``People are selling gold, because the dollar is strong as a result of the ECB saying they are not averse to cutting rates,'' said Walter Otstott, a senior broker at Dallas Commodity Co. in Dallas. ``If they bothered to think about it, they would realize that we have the Fed, ECB and Bank of England in the rate-cut mode. This can only be bullish for the metals.'' Otstott said he bought gold and silver today. Crude-oil futures tumbled as much as 2.9 percent today after falling 2.4 percent yesterday. The price fell to a four- week low today after a U.S. Energy Department report showed that petroleum inventories last rose more than analysts forecast. Gold gained 31 percent last year, while the dollar fell 9.5 percent against the euro and oil jumped 57 percent. Gold futures fell 3.8 percent in 1976, the first year the metal began trading on the Comex. The price rose for the next four years, peaking at $873 in January 1980.
--- In obrolan-bandar@yahoogroups.com, Elaine <[EMAIL PROTECTED]> wrote: > > *Gold, silver and high yielding treasury bonds. > > EL > * > On Jan 16, 2008 8:58 PM, indra zen <[EMAIL PROTECTED]> wrote: > > > el... i just wonder where all the money gone anyway...? do you thing the > > big player will put their money in the jungle? > > >
