G.O.O.D

Source: Bloomberg.com

Gold prices rose the most in a week as mounting tensions in the Middle East and South Asia boosted the appeal of the precious metal as a haven.

Palestinian militants yesterday launched their biggest rocket attack on southern Israel in at least six months after a truce expired Dec. 19. Pakistani troops are being diverted from tribal areas near Afghanistan to the border with India, the Associated Press reported. Gold gained 4 percent this week.

“The only possible explanation for gold’s gains are the geopolitical tension in Gaza and in India and Pakistan,” said Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois.

Gold futures for February delivery climbed $23.20, or 2.7 percent, to $871.20 an ounce on the Comex division of the New York Mercantile Exchange, the biggest gain for a most-active contract since Dec. 17. The metal is up 6.4 percent this month.

Silver futures for March delivery gained 18 cents, or 1.7 percent, to $10.53 an ounce. The metal is still down 29 percent this year.

Indian Foreign Minister Pranab Mukherjee stepped up diplomatic pressure on Pakistan to act against those behind last month’s Mumbai terrorist attacks.

India is the world’s biggest buyer of gold, accounting for more than 20 percent of purchases last year, according to the World Gold Council.

Some investors buy gold as a haven when military tensions threaten to disrupt financial markets. Crude oil rallied as much as 7.2 percent.

The Middle East was responsible for 31 percent of global oil production in 2007, according to BP Plc, which publishes its annual Statistical Review of World Energy each June.

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Technorati Tags: Gold, oil, commodities

Source: Reuters.com

Gold dropped as much as 9.6 percent on Friday, reversing sharp morning gains as a wave of panic prompted investors to dump assets across the board to meet liquidity needs.

Gold traded in a wide range of more than $100 an ounce on Friday, capping a volatile week with gains of only 1.3 percent even as global stock markets lost heavily.

Bullion in overnight trade touched a 2-1/2 month high of $931 as a slide in the global equity markets sent investors racing to a safe haven from the financial crisis.

However, even gold could not withstand relentless selling across all asset classes as investors sought cash to cover margin calls amid steep losses in stocks. It hit a low of

$823.50.

Spot gold dropped to $845.80 at 2:50 p.m. EDT (1850 GMT), down 7.2 percent from Thursday’s nominal close at $911.50.

“It’s total panic. People are so scared that they are looking to liquidate everything that has cash value and to stay away from everything,” said Bruce Dunn, vice president of New Jersey-based Auramet Trading.

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Source: MarketWatch

Gold futures plummeted Friday — at one point falling 7.6%, the biggest percentage drop in more than 25 years — as speculation that a Washington-engineered rescue plan could avert financial crisis reduced demand for gold as an investment haven.

Gold for December delivery was last down $24.50, or 2.7%, at $872.50 on the Comex division of the New York Mercantile Exchange. The precious metal is set to end the week up 13% after the previous two sessions’ big rallies.

The benchmark contract fell as much as $68.50 an ounce, or 7.6%, in electronic trading overnight. This percentage loss worked out as the biggest seen since February 1983.

The main catalyst for the reversal following two days of rallying in gold was the Bush administration’s sweeping plan for isolating financial institutions’ troubled mortgage-backed assets. Congressional leaders promised quick work toward a legislative solution…

“Gold is selling down on the news of the [government] bailout,” said Dennis Gartman, author of commodities newsletter the Gartman Letter.

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Source: The Associated Press

Gold prices exploded Wednesday — posting the biggest one-day gain ever in dollar terms — as fears of more credit market turmoil unnerved investors and triggered a flood of safe-haven buying.

Gold for December delivery rose as much as $90.40, or 11.6 percent, to $870.90 an ounce in after-hours trading on the New York Mercantile Exchange after jumping $70 to settle at $850.50 in the regular session. That was the biggest one-day price jump ever; gold’s previous single-day record was a $64 gain on Jan. 29, 1980.

The huge rally came after the government moved overnight to rescue troubled insurer American International Group Inc. with an $85 million bailout loan. The Federal Reserve stepped in after AIG, teetering on collapse from losses tied to the subprime crisis and the credit crisis, failed to find adequate capital in the private sector. The emergency measure came a day after Lehman Brothers Holdings Inc., a 158-year-old investment bank, filed for bankruptcy after failing to find a buyer.

Fearing more tightening of credit markets, investors reacted swiftly and began dumping stocks and socking money into gold, silver and other safe-haven commodities. Gold is especially attractive during times of crisis because the metal is known for holding its value.

Jon Nadler, analyst with Kitco Bullion Dealers Montreal, said buying accelerated as rumors spread across trading floors that another financial firm may be in trouble.

“The psychology right now has everyone asking, ‘Who’s next?,” Nadler said. “If another big bank falls, we could see an implosion and that has people very worried.”

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