Wary investors buy gold, silver despite improving consumer confidence, home salesBy AP
Tuesday, August 31, 2010
Gold, silver rise as investors seek safer assets
Wary investors turned to gold Tuesday, sending the price to its highest level in two months, despite slightly more optimistic economic news.
Gold for December delivery rose $11.10 to settle at $1,250.30 an ounce as it headed toward its record high settlement of $1,258.30 an ounce, which was set earlier this year.
Silver also gained as concerns lingered about the economy even after new reports showed improving consumer confidence and home sales. The December contract settled up 35.8 cents at $19.432 an ounce.
“Ultimately, the economy is still in somewhat of a fragile area and I think the market is very sensitive to news,” Lind-Waldock senior market strategist Rich Ilczyszyn said. “Right now, we’re seeing a trade into gold based on a little bit of fear.”
Most analysts believe commodities traders, like stock investors, are awaiting Friday’s monthly employment report to gain perspective about where the markets may be headed after Labor Day.
The Conference Board said its Consumer Confidence Index was 53.5 in August. The August number indicates consumer confidence hasn’t improved from a year ago.
The index measures how Americans feel about business conditions, the job market and the next six months.
Separately, the Standard & Poor’s/Case-Shiller 20-city home price index rose 1 percent in June from May and 4.2 percent from a year ago. A third report said the Midwest’s manufacturing activity declined, similar to decreases reported by other regional manufacturing indexes.
The housing and manufacturing reports contributed to a drop in copper prices, which settled down 5.95 cents to $3.3700 a pound.
Dave Meger, vice president of metals trading at Vision Financial Markets, said he also believes some traders were taking profits after copper prices jumped recently.
In other metals contracts, September palladium rose $2.50 to settle at $500.40 an ounce while October platinum lost $9.60 to $1,523.50 an ounce.
Energy prices also felt the impact of the economic uncertainty ahead of Labor Day weekend.
Benchmark crude for October delivery lost $2.78 to settle at $71.92 on the New York Mercantile Exchange.
In other Nymex trading in September contracts, heating oil slipped 3.08 cents to settle at $1.9944 a gallon and gasoline fell 4.47 cents to settle at $1.8894 a gallon. October natural gas rose 0.4 cent to settle at $3.816 per 1,000 cubic feet.
In grains trading, December corn dropped 2.25 cents to settle at $4.3925 a bushel after hitting $4.45 earlier in the day; December wheat retreated 18.75 cents to at $6.8575 a bushel while November soybeans fell 12.5 cents to $10.10 a bushel.
Tags: Commodity Markets, Home Buying, Home Selling, Materials, Prices, Residential Real Estate