Precious Metals

The Dow ratcheted up another 100 points last night driven largely by GM. Bear Stearns rumours also fuelled the fire along with a very poor durable goods number.

After much anticipation BHP upgraded its Olympic Dam total ore resource by 75%, but its 2P resource by only 7%.

A slew of poor economic data and profit reports sent the Dow off into negative territory last night, before everybody remembered the Fed was standing ready.

Gold is suddenly under the global spotlight once more, as the believers argue blue sky and the non-believers are bemused.

There were economic data released last night, but there will be quite a lot more this week. After posting solid gains it was time to take some money out. The IMF also disappointed the financial sector.

The Dow had added 53 points on the close to finish a tumultuous week up 2.8%.

Barclays Capital has lifted its long-term base metal price forecasts and expects copper, lead and tin to gain the most, while also increasing its gold price outlook for the rest of this year.

Wall Street began to feel more edgy last night as the US dollar accelerated its slide against major currencies. Mixed earnings reports included a shock result from Goldman Sachs.

Positive momentum carried through on Wall Street last night. Base metals in London posted the gains they would have made yesterday had the exchange not closed before the Fed announcement.

Just as important as the rate cut itself is the accompanying Fed rhetoric.