By SARA LEPRO, AP Business Writer Sara Lepro, Ap Business Writer
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Wed Feb 11, 2009 4:34 pm ET
Gold soars as anxiety over financials remains
NEW YORK – Gold prices continued their ascent Wednesday, logging a two-day advance of nearly 6 percent, amid lingering concerns over the health of the country's banks.
Oil prices and agriculture futures fell.
Gold prices have soared this week as anxiety on Wall Street remains high. Investors are largely disappointed in the Treasury Department's overhaul of the financial bailout package passed last fall. As a result, the market is losing faith in the government's ability to restore the ailing industry, as well as the economy, to health.
In times of economic distress, investors often move to gold for safety as its value holds up much better than many other investments.
There is also an increasing concern that the government's efforts to revive the economy will trigger inflation over the long term. The market is awaiting a resolution on a nearly $800 billion economic stimulus package. Key lawmakers announced agreement Wednesday on a bill that reconciles differences between the House and Senate versions, and President Barack Obama could sign it within days.
The bill centers on the creation of millions of jobs as well as the devotion of billions of dollars to a vast public works program. As a result of so much money being pumped into the system, economists warn that inflationary pressures may return. Gold is often used as a hedge against inflation.
Gold for April delivery jumped $30.30 to settle at $944.50 an ounce on the New York Mercantile Exchange — its highest close since last July.
Other precious metals prices were mixed. March silver rose 39 cents to $13.52 an ounce, while March copper futures fell 3.6 cents to $1.54 a pound.
On Wall Street, stocks fluctuated in and out of positive territory for much of the day. The Dow Jones industrials ended up 50 points at 7,939. Broader stock indexes rose less than 1 percent.
The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.75 percent from 2.82 percent late Tuesday.
Oil prices plunged following a government report showing another huge jump in crude inventories.
Light, sweet crude for March delivery dropped $1.99 to settle at $35.94 a barrel.
In other Nymex trading, gasoline futures jumped 3.7 cents to $1.28 a gallon, and heating oil gained 2.1 cents to $1.32 a gallon.
Grain prices fell on the Chicago Board of Trade. March wheat futures lost 12.75 cents to $5.4325 a bushel, while corn for March delivery fell 8.25 cents to $3.6850 a bushel.
March soybeans fell 16 cents to $9.78 a bushel.
–
Wed Feb 11, 2009 4:34 pm ET
Gold soars as anxiety over financials remains
NEW YORK – Gold prices continued their ascent Wednesday, logging a two-day advance of nearly 6 percent, amid lingering concerns over the health of the country's banks.
Oil prices and agriculture futures fell.
Gold prices have soared this week as anxiety on Wall Street remains high. Investors are largely disappointed in the Treasury Department's overhaul of the financial bailout package passed last fall. As a result, the market is losing faith in the government's ability to restore the ailing industry, as well as the economy, to health.
In times of economic distress, investors often move to gold for safety as its value holds up much better than many other investments.
There is also an increasing concern that the government's efforts to revive the economy will trigger inflation over the long term. The market is awaiting a resolution on a nearly $800 billion economic stimulus package. Key lawmakers announced agreement Wednesday on a bill that reconciles differences between the House and Senate versions, and President Barack Obama could sign it within days.
The bill centers on the creation of millions of jobs as well as the devotion of billions of dollars to a vast public works program. As a result of so much money being pumped into the system, economists warn that inflationary pressures may return. Gold is often used as a hedge against inflation.
Gold for April delivery jumped $30.30 to settle at $944.50 an ounce on the New York Mercantile Exchange — its highest close since last July.
Other precious metals prices were mixed. March silver rose 39 cents to $13.52 an ounce, while March copper futures fell 3.6 cents to $1.54 a pound.
On Wall Street, stocks fluctuated in and out of positive territory for much of the day. The Dow Jones industrials ended up 50 points at 7,939. Broader stock indexes rose less than 1 percent.
The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.75 percent from 2.82 percent late Tuesday.
Oil prices plunged following a government report showing another huge jump in crude inventories.
Light, sweet crude for March delivery dropped $1.99 to settle at $35.94 a barrel.
In other Nymex trading, gasoline futures jumped 3.7 cents to $1.28 a gallon, and heating oil gained 2.1 cents to $1.32 a gallon.
Grain prices fell on the Chicago Board of Trade. March wheat futures lost 12.75 cents to $5.4325 a bushel, while corn for March delivery fell 8.25 cents to $3.6850 a bushel.
March soybeans fell 16 cents to $9.78 a bushel.
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