Finotec News Archive - September 05 2007
Gold Futures Fall as Global Equity Markets Decline
``Gold is still subject to the overall movement of stocks,'' said Frank McGhee, head metals trader at Integrated Brokerage Services LLC in Chicago.Rodian Rahnayev 
05 September 2007
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Gold fell on speculation a decline in global equity markets will reduce investment demand for the precious metals.Gold has often moved in step with stocks this year, rallying 2.6 percent in the previous two sessions as the Standard & Poor's 500 Index added 2.2 percent. The S&P fell as much as 1.4 percent today after pending home sales dropped. Gold is still up 8.3 percent this year.
``Gold is still subject to the overall movement of stocks,'' said Frank McGhee, head metals trader at Integrated Brokerage Services LLC in Chicago.
The S&P fell for the first day in three after a National Association of Realtors report showed the number of Americans signing contracts to buy previously owned homes in July dropped by the most since records began in 2001. A separate report showed declining sales of commercial properties. Stocks in Asia and Europe also fell.
Still, gold's losses were limited on speculation a housing slump would force the Federal Reserve to cut interest rates to bolster the economy. Five of the past six bear markets for the U.S. currency have resulted in a higher gold price. ``If there's a problem with the dollar, money flows to gold,'' Goodis said.
Finotec Analysis Team
05 September 2007
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