Gold & The Stimilus Package
Gold falls below $900 as traders await stimulus plan
By Moming Zhou, MarketWatch
Last update: 2:22 p.m. EST Feb. 9, 2009Comments: 303NEW YORK (MarketWatch) -- Gold futures fell below $900 an ounce Monday as expectations that the U.S. will pass stimulus and bank-aid plans reduced safe-haven buying. Other metals also fell.
Some investors sold gold to take profits after the metal rose more than $20 in the previous three sessions, analysts said.
Gold for February delivery fell down $21.50, or 2.4%, to close at $892.40 an ounce on the Comex division of the New York Mercantile Exchange.
"Gold maintained a supportive tone, but did succumb to profit taking," said analysts at Action Economics. "Momentum was limited as the market awaited the outcome of the U.S. stimulus package."
The February contract expires Feb. 20, with open interest, or the total amount of outstanding contracts, remaining at 320,200 ounces as of Monday. Gold inventories held by Comex for future delivery stood at 2,723,490 ounces as of Friday, according to the latest data from the exchange.
Stimulus package
Developments over the weekend pointed toward Tuesday being the decisive day for both the stimulus and bank debt plan. The Senate is looking to cut off debate Monday, which would lead to a vote on the stimulus bill on Tuesday.
Meanwhile, a key Obama aide said Sunday the government wanted to create incentives for the private sector to invest in banks.
"It can't all be private capital, but with the right kinds of government guarantees and the right kinds of financing, strategic approaches, [Treasury Secretary Timothy] Geithner believes we can bring in substantial private capital," said Obama's chief economic advisor Lawrence Summers on Fox News Sunday. See full story.
Other metals also edged lower Monday. March copper slid 1% to $1.613 a pound, while March silver fell 2.5% to $12.83 an ounce. March palladium dropped 3.5% to $205.85 an ounce, and the April contract for sister metal platinum lost 0.8% to $995.90 an ounce.
Limiting gold's losses, the greenback fell against its major rivals, with the dollar index (DXY:US Dollar Index Future - Spot Price
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DXY 85.07, +0.28, +0.3%) down more than 0.5% to 84.812.
Holdings of SPDR Gold Trust, the largest exchange-traded fund oriented toward gold, remained at the record high of 867.19 tons as of Friday, unchanged from a day ago, according to the latest data from the fund. The total was almost 80 tons, or 10%, higher than that reported a month earlier
