Continued safe-haven demand amid worries about the global economy and financial sector underpinned gold futures, although the market remained within its recent trading range. Spot gold was last quoted at $858.95. Comex gold futures strengthened $8.70 (1.02%) to $858.80. Spot silver was last quoted at $11.41.
West Texas Intermediate was last quoted at US$42.27 per barrel.

Base metals continued to slide Thursday, as worse-than-expected US housing and jobs data weakened sentiment on demand for industrial metals.

Base metals on the LME finished mixed. Aluminium fell $8 (0.60%) to $1,335 while copper weakened $145 (4.46%) to $3,105 and nickel rose $125 (1.15%) to $10,975. Zinc dropped $20 (1.74%) to $1,130 and lead shed $18 (1.64%) to $1,053. Comex copper was last quoted at 138.10 US cents per pound.

US Stocks Retreat as Banking System Remains Under Fire
US stocks traded lower late Thursday as an afternoon bounce collapsed under the weight of more dire concern about the banking system and its impact on the overall economy.

Setting the tone in a volatile trading session continued to be the banking sector as insurers and regional banks were hit hard by concerns about their profits, while larger Wall Street bellwethers suffered from continued speculation there might be even more government oversight and directives from the incoming Obama administration.

The Dow Jones Industrial Average weakened 105.3 points (1.28%) to 8,122.8 as a morning release of job cuts and lower second-quarter earnings from bellwether Microsoft continued to weigh on the index. Read more »

Rising inventories and a technical selloff drove copper to a four-day low Wednesday, and aluminium to its lowest close since April 2003.

Base metals on the LME finished down. Aluminium fell $47 (3.38%) to $1,343 while copper weakened $100 (3.02%) to $3,210 and nickel dropped $425 (3.77%) to $10,850. Zinc shed $75 (6.12%) to $1,150 and lead lost $88 (7.56%) to $1,070. Comex copper was last quoted at 141.90 US cents per pound.

Gold futures closed lower on a day when the dollar firmed against the euro, but the metal was mostly sideways during an “inside day” on a daily chart. Spot gold was last quoted at $854.70. Comex gold futures slid $5.10 (0.60%) to $850.10. Spot silver was last quoted at $11.27.

West Texas Intermediate was last quoted at US$41.32 per barrel.

The yen rose to a seven-year high against the euro and a 13 1/2-year high against the dollar Wednesday after the expiration of a large options contract.

Bank of America Worries Loom

US stocks popped into the green Thursday afternoon as traders used the psychologically significant level of 8,000 for the Dow Jones Industrial Average as an entry point, though investors still fretted about Bank of America’s capital needs.

The Dow Jones Industrial Average climbed 12.4 points (0.15%) to 8,212.5.

Shares of BofA were down by 18% at $8.38, off their low at $7.35 after a report that the largest US bank by assets could require government assistance to absorb losses from its Merrill Lynch acquisition. Shares of the bank pared their losses after a report that the US might guarantee $100bn to $200bn for BofA. Citigroup, which rushed into the sale of a controlling stake in its brokerage recently to raise capital, was off 19%.

The Dow hit its low for the session around 12:40 EST, off more than 200 points at 7,995, with the move marking its first intraday trek below 8,000 since Nov. 21. The Dow recorded its low of the current bear market on Nov. 20, when it closed at 7,552.

The Standard and Poor’s S&P500 increased 1.1 points (0.13%) to 843.7.

The financial sector remained the fulcrum of a volatile market, leading moves up and down.

From an earnings standpoint, JPMorgan shed 17 cents to $25.74 after posting a profit of 7 cents a share for the fourth quarter. Earnings fell 76% from a year ago and Chief Executive Jamie Dimon said loan demand “is dropping rather dramatically.”

Many veteran traders and analysts believe the market is likely to test its lows in the coming weeks, though there is some disagreement over whether the old lows will hold, considering the continuing flurry of fourth-quarter profit reports that are likely to contain more nasty surprises.

The Nasdaq rose 22.2 points (1.49%) to 1,511.8 though it was hurt by a 3% drop in Apple on worry about the health of CEO Steve Jobs. He had said late Wednesday he would take a medical leave from the company.

Commodity prices fell, hurting the energy and industrial sectors. As demand in economies worldwide seems to weaken with each data point, markets are pricing in a “deflationary” phase, where the prices of all assets decline, reducing incentive for investment and trade.

For Australian ADRs listed on the NYSE, BHP Billiton firmed $1.23 (3.19%) to US$39.78, Rio Tinto Plc added $3.42 (4.12%) to US$86.42, ResMed advanced 26 cents (0.68%) to US$38.36, Telstra Corporation improved 20 cents (1.67%) to US$12.20, Telecom Corporation of NZ dropped 18 cents (2.74%) to US$6.38 and Westpac climbed 14 cents (0.26%) to US$53.95.

In economic news, US producer prices fell last year for the first time since 2001, while the number of idled workers filing new claims for jobless benefits in the last week resumed an upward trend. One piece of news not as bad as feared, Read more »