Has Gold Seen Its Highs?
Secretary of State Colin Powell’s presentation took
center stage today. Hoping to gain U.N. support for an attack against
Iraq, Powell presented his “compelling” evidence which included photographs,
intercepted telephone messages, and testimony from Iraqi defectors. In a
90-minute testimony, Powell stated his case and said that “Iraq continues to
produce chemical and biological weapons and Saddam Hussein and his regime have
made no effort to disarm.” In addition he said that Iraq is on a “deliberate
campaign to prevent any meaningful inspection.” Iraq responded to Powell’s
speech as “utterly unrelated to the truth.”
Stock indices futures had a wild ride, treading water before Powell’s speech.
They later staged a strong rally in which Dow futures were up over 100 points.Â
However the rally soon faded after his speech. At the close, the March Dow
futures
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844.50, and the March Nadaq 100 futures
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Treasury futures sold off on news that the government will reissue three-year
notes and auction off $42 billion worth of five- and ten-year notes next week.
Bond futures also declined as more economic data suggested that the economy is
strengthening. After showing signs of improvements in the manufacturing sector,
the service sector is also showing strength. The ISM services index for January
rose to 54.5 from 54.2. The reading surpassed expectations of a reading of 54.
Readings above 50 signify expansion and this was the 12th consecutive month of
expansion in the service sector. The 10 year futures
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113 29/32 and th3 30 year contract
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The dollar slipped to near a four-year low but later recovered after Powell’s
speech. The March dollar index
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March euro
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March crude pushed to another two-year high as supplies of crude distillates
such as heating oil, diesel fuel, and gasoline drop. Crude also rose after more
evidence was presented against Iraq. March crude
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33.93.
Gold futures also had a volatile session as the April contract got as high as
390.80 in the night session ahead of the speech. However April gold
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later finished down 2.90 to 377.2.