Gold News & Info

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold fell 1%, approaching a seven-week low, as another round of weak quarterly earnings triggered a major sell-off in risk assets. The Dow dropped more than 240 points and the Global Dow lost 1.5% as weak corporate profits raised concerns that the global economy is slowing more than expected. Gold's sell-off was partly technical, as traders were forced to liquidate futures contracts in order to provide cash for margin calls on losing positions in equities. The dollar rallied, further pressuring gold, while commodities and oil dropped. The other precious metals fell harder, with silver losing 1.4%, platinum 2.3%, and palladium 4.6% to close under $600 for the first time since August.

At the Comex close: December gold fell $16.90 to $1,709.40; December silver lost 46 cents to $31.79; January platinum slid $36.60 to $1,575.60; and December palladium tumbled $28.80 to $593.85 an ounce.

News out of Europe also propelled today's risk-aversion. French business confidence fell to a three-year low, Spain�s economy contracted for the fifth straight quarter, and Spanish Prime Minister Rajoy indicated that he might not achieve his budget-deficit targets, which are required to qualify for aid. These developments undermined confidence that the eurozone will be able to contain its debt crisis, helping to drive European stocks to a seven-week low.

In addition, the eurozone's primary bailout fund, the $652 billion European Stability Mechanism (ESM), is now facing another legal challenge only one month after Germany's high court found it to be constitutional. A member of the Irish parliament filed suit that the ESM "violates the no-bailout provision under EU law and encroaches on the bloc�s role in economic and monetary policy," according to Bloomberg. The EU's supreme court is hoping to render a fast-tracked verdict by December. The bailout facility is widely viewed as vital to saving the eurozone from a fiscal meltdown.