Modest gains for precious metals

Prices bolstered by weak stocks and a softer U.S. dollar

Bullion prices ended the U.S. day session modestly higher on Tuesday, 07 October 2014 at Comex. Gold extended gains on Tuesday to rise for a second session, bolstered by weak stocks and a softer U.S. dollar.

Gold for December delivery climbed $5.10 to settle at $1,212.40 an ounce.

December silver edged up a penny to $17.24 an ounce.

The U.S. stock market slid on worries about global growth after the IMF again cut its global growth forecasts for 2014 and 2015.

The U.S. Dollar index was last down 0.2% on Tuesday. In the prior session, gold benefited from a lull in the dollar's bull run to record a day of gains.

The International Monetary Fund on Tuesday reduced its world economic growth estimate, dropping the annual growth rate to 3.8% from 4% in an earlier forecast. The news is not surprising but did add a bit to the risk aversion seen in the market place on Tuesday. This pressured the U.S. stock market, which in turn also lent some buying interest to safe-haven gold.

There was also dour economic news coming out of the European Union Tuesday, as Germany's factory output was down 4% on the month in August, which was well below expectations of a decline of 1.5%. The struggling European Union economy continues to be a major drag on the entire world economic system. The sinking Euro currency is a result of the economic troubles in the EU. Also, the U.S. dollar has garnered much of its recent strength from a flagging Euro currency.

Most of China has been on holiday the past week and Wednesday is the end of the Golden Week holiday. The commodity markets will see increased participation from the Chinese, and look to fresh China economic readings, as the world's second-largest economy gets back to work.

Economic data at Wall Street was limited to job opening and Consumer Credit report. The Job Openings and Labor Turnover Survey for August indicated job opening increased to 4.835 million from 4.605 million. Consumer credit increased by $13.50 billion in August, down from a downwardly revised $21.60 billion (from $26.00 billion) in July, while the consensus expected an increase of $20.00 billion. The highlight of the U.S. data week is Wednesday afternoon's FOMC minutes. Recent months have seen the FOMC minutes move the markets.

Powered by Capital Market - Live News