Gold continued its recent strength yesterday. The metal hit a new five-week high high as it climbed more than $6 on the day to above $430/oz in afternoon trading in New York. The move came as it was reported that further gold sales from the International Monetary Fund are unlikely. “IMF debt relief would be financed by existing IMF resources and would require no use of gold,” said US Treasury Secretary John Snow on the Treasury’s website. “The G-8 are also committed that the IMF's financing capacity for low-income countries going forward will not be diminished.”
Overnight, some of the shine has come off the metal, which has declined more than $3 to a current $427. Silver showed a similar pattern, rising more than 10 cents in morning trading, to as high as $7.29/oz. It has since settled back slightly to a current $7.25. (Click here for charts)
The declines in gold and silver were mirrored by a fall in the dollar. The greenback plummeted from around $1.2050 to a current $1.213 under the euro on speculation that a report today will show that US retail sales fell in May for the first time in eight months. (Click here for currency prices)
Showing the opposite pattern, oil soared nearly 4%. The rise came after the Association of the German Petroleum Industry reported that European consumption of heating oil was 50% higher in May, year-on-year. Crude is currently trading at $55.50.
As oil went up and gold went down, the base metals have remained largely directionless. Copper is currently unchanged from opening levels at $1.5798/lb after rising as high as $1.59/lb intraday. Nickel, zinc and lead also moved mainly sideways, currently at $7.6408/lb, $0.5789/lb and $0.4491/lb, respectively. Aluminum was the sole metal to move with some decisiveness, losing more than half cent to a current $0.7651/lb.
