Tri-City Voice Newspaper - What's Happening - Fremont, Hayward, Milpitas, Newark, Sunol and Union City, California

 

February 4, 2009 > Gold prices soar as investors flee Wall Street

Gold prices soar as investors flee Wall Street

By Sara Lepro, AP Business Writer

NEW YORK (AP), Jan 30 _ Gold prices soared to their highest close in six months Friday as investors sought shelter in the metal, believing the economy is taking a turn for the worst.

Gold has been the one bright spot among commodities, benefiting from safe-haven buying as disappointing corporate earnings reports and rapidly increasing layoffs have made it difficult for investors to foresee an end to the recession. Investors believe demand for most commodities will be weak along with the economy.

On Friday, the Commerce Department said gross domestic product, the widely followed measure of the economy, shrank at a 3.8 percent annual pace in the final three months of 2008. That compared with a 0.5 percent decline the previous quarter.

While the reading was much better than the 5.4 percent drop economists expected, many analysts believe the economy has been contracting at an even faster pace so far this year. Investors took the report as a sign that the worst is yet to come.

Demand for gold often spikes when times are tough because its value typically holds up better than many other investments. Prices have risen 5 percent so far this year.

Gold for April delivery jumped $21.90 to settle at $928.40 an ounce on the New York Mercantile Exchange. That marked the metal's highest close since last July. Prices topped out at a record above $1,033 an ounce in March.

Other precious metals prices also rose. March silver gained 42 cents to $12.5650 an ounce, while March copper futures added 1.1 cents to $1.4685 a pound.

On Wall Street, stocks slumped for a second straight day as the GDP report and lackluster earnings weighed on investors. The Dow Jones industrials fell 148 points to finish at 8,000. Broader stock indexes fell more than 2 percent.

The dollar was mixed against other major currencies, while the yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.80 percent from 2.87 percent late Thursday.

Energy prices, meanwhile, seemed to be supported by the fact that the economy did not shrink as much as feared. Investors are hopeful that production cuts by major oil producers will begin to take effect.

At the same time, oil companies reported feeling the effects of sinking prices. Exxon Mobil Corp. said Friday that it surpassed its own record for annual earnings by a U.S. company last year, but saw a big drop in profit during the fourth quarter. Chevron Corp.'s fourth-quarter results also suffered from the late-2008 plunge in oil prices.

Light, sweet crude for March rose 24 cents to settle at $41.68 a barrel.

In other Nymex trading, gasoline futures rose 2.9 cents to $1.26 a gallon, and heating oil gained 2.67 cents to $1.4550 a gallon.

Grain prices were mostly lower on the Chicago Board of Trade.

March wheat futures fell 10 cents to $5.68 a bushel, while corn for March delivery dipped 2.75 cents to $3.79 a bushel.

March soybeans rose 9.5 cents to $9.80 a bushel.

Home        Protective Services Classifieds   Community Resources   Archived Issues  
About Us   Advertising   Comments   Subscribe   TCV Store   Contact

Tri Cities Voice What's Happening - click to return to home page

Copyright © 2014 Tri-City Voice