Gold Remains Below $500

December 21, 2005
Ashton Dorkins

Volatility was low as the holiday period drew closer.
A number of economic reports failed to stir much enthusiasm, except for the
Weekly Petroleum Status report.

In today’s economic news, the Mortgage Bankers
Association reported a drop a loan applications
(report).
3rd Quarter GDP was revised downward
(report)
and Crude Oil Inventories rose

(report).

Crude Oil and Heating Oil both closed higher
despite the 2nd week of rising inventory. However, a breakdown of the report
revealed that distillates fell much more than expected and were behind the price
rise.

Chart courtesy of FutureSource.com

Treasuries closed lower for the 3rd consecutive day and the US Dollar rose
for the 3rd consecutive day after today’s reports. It was the first 3-day gain
for the Dollar versus the Euro in 6-weeks.

For a review of the Dollar in 2005 and a look ahead to 2006, read

Jes Black’s column from yesterday.

Gold closed under $500 for the 2nd consecutive
day. However, the yellow metal stabilized after falling almost $50 in 8-days.