What’s Making Gold Shine
Geopolitical
tensions continued to make investors uneasy as more money is being
plowed into the safe havens of gold and bonds while the dollar and stocks are
again lower. Today’s news of North Korea’s expulsion of UN nuclear inspectors
heightened investors’ nervousness as bonds pushed to a month-long high. And in a
sign that the looming war with Iraq is getting closer, the Pentagon has ordered
the Navy to prepare aircraft carriers for potential battle. The 30-year
(
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PowerRating) contract finished up 1 4/32 at 112 27/32 and the 10-year finished up
260 at 115 015. Both contracts are challenging resistance at their October
highs.Â
Gold continued to dig deeper into its
five-year high. March gold finished up 0.40 at 349.70.
Oil also finished higher despite some
workers going back to work after a 26-day strike. March crude finished up 0.27
at 31.80.
However, all this nervousness was not
good for the dollar as it fell for the fourth week against the euro. Until some
stability from the military tension arises, the dollar will continue to be under
pressure. The dollar will also be hurt as foreign investors will be less likely
to buy US stocks in an unstable environment of potential war and an uncertain
economic recovery.
Stocks were also hurt again amid the
geopolitical uncertainly and weakness in the retail sector. Even news of record
new home sales did little to boost stocks. New home sales rose to an annual rate
of 1.069 million units in November, up 5.7% from last month. The March S&P
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PowerRating) dropped 18.80 to close at 872.00 and the Nasdaq
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PowerRating) dropped
17 to 1003.00.
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