Monday, October 6, 2008

Gold Only Commodity to Gain as Recession Fears Grow

Even though gold was pummeled earlier in the trading session, dropping to a two-week low of $828.40, it was able to settle up by $33 to finish the day at $$866.20 for December delivery. It was the only commodity in the positive for the day.

Even though gold was in the positive, it hasn't performed in the difficult enconomic environment as a place of safety, as jewelery sales decline, the U.S. dollar is holding some of its strength, and speculators hang on to their money.

When the dollar falls, at that time gold should enjoy a hefty climb again.

The Reuters-Jefferies CRB Index participated in the decline along with individual commodities, as it plunged to a 13-month low, following the worst week of its history.

Oil continued to fall in price as well, as it dropped below $88 a barrel to $87.81 in the U.S., while London Brent crude settled at $83.68 for the day, a $6.57 decline.

Other significant declines in the commodities market were soybeans, which fell over 7percent to yearly lows, while copper also fell by over 7 percent to a 19-month low of $2.493 a pound in New York. Corn finished at its trading limit of 30 cents a bushel to settle at $4.24 on the CBOT, a 6.6 percent fall.

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