Gold, Silver Climb on Slumping Dollar, Higher Energy Costs Gold and silver rose after a drop in the dollar against the euro and higher energy costs sparked demand for the precious metals as an investment. Gold has gained 21 percent this year, reaching the highest in 27 years, as crude oil surged to a record and the dollar fell to the lowest ever against the euro. Investment demand in the StreetTracks Gold Trust, an exchange-traded fund backed by bullion, has increased 31 percent this year to a record 594 metric tons. ``The old combination of a sharp spike in crude-oil prices and a further slide in the dollar prompted a good rise in gold prices,'' said Jon Nadler, an analyst at Kitco Minerals & Metals Co. in Montreal.
Buffett sees dollar weakness Billionaire investor Warren Buffett said on Thursday he expected the dollar to weaken further, adding that South Korean stocks offered better value than other world markets. Buffett, worth $52 billion according to Forbes magazine in March, said his Berkshire Hathaway company is still on the hunt for bargains as the U.S. subprime mortgage crisis plays out."We are still negative on the dollar. We bought stocks in companies that are earning their money in other currencies," he told reporters during a visit to Berkshire's Korean cutting tool maker subsidiary, TaeguTec. "We are gaining foreign currency exposure that we like," said the veteran investor, known as the "Oracle of Omaha" for his astute investments.
Roots of credit crisis laid at Fed's door In the wake of the financial market turmoil that arose over the summer and even now threatens to push the U.S. into recession, there has been a remarkable lack of finger-pointing so far over the cause of the crisis. But one observer, Tom Schlesinger, the founder and executive director of the Financial Markets Center, a think tank that has followed the Federal Reserve closely for the past decade, believes the blame for the crisis falls squarely on the Fed and accuses the central bank of "regulatory foot-dragging" that has harmed the public. Schlesinger maintains the Fed's prevailing regulatory philosophy has shifted from that of 20 or 25 years ago, which in essence was "here is the line between right and wrong, don't cross it," to a current underlying policy that "anything and everything that might be called financial innovation ought to be embraced."
Orders for durable goods fall for second straight month Demand for defense goods tumbled in September, pushing down orders for durable goods for a second month in a row, the Commerce Department reported Thursday. Total orders fell 1.7% in September after a revised 5.3% decline in August. Economists surveyed by MarketWatch were expecting orders to rise 1.1%. "These are modest gains, but in an environment when businesses are worried by the economic outlook and possible credit crunch, we still see private orders gaining," said Stephen Gallagher, economist for Societe Generale. "The results do not much alter expectations that growth will be at 3.0% to 3.3% in the third quarter when reported next week."
New-home sales rise 4.8% in September Sales of new homes rebounded in September from summer sales levels that were much weaker than previously reported, the Commerce Department reported Thursday. Sales increased 4.8% to a seasonally adjusted annual rate of 770,000 from a revised 735,000 in August, an 11-year low. Previously, August's sales had been reported at a 795,000 pace. September's sales were slightly higher than the 758,000 pace expected by economists surveyed by MarketWatch. The three previous months were revised sharply lower, which means the housing market was much weaker in the middle of the year than previous believed, and no one believed it was strong. "The crash continues," wrote Ian Shepherdson, chief economist for High Frequency Economics. Sales fell at a 35% annualized pace in the third quarter, he said.
China says economy still growing rapidly China's fast-growing economy slowed slightly in the third quarter in a sign that tightening measures were taking effect, the government said Tuesday, and economists said the peak of the latest boom may have passed. The 11.5 percent jump in economic output for the three months through September kept China on track to surpass Germany as the world's third-largest economy by early 2008. The growth figure, a decline from the 11.9 percent rate reported for the previous quarter, suggests China's expansion has peaked, economists said. They said growth is expected to slow further but stay above 10 percent next year. "Due to macro-economic controls, we have turned the economy from being an overheating one to being one of speedy growth," a spokesman for the National Bureau of Statistics, Li Xiaochao, said at a news conference to announce the growth figures.
China beats Germany to take world trade crown China has surged ahead of Germany for the first time to become the world's top exporter, prompting ever louder demands from the United States and Europe to revalue the yuan. Data from the World Trade Organization show that the country vaulted past the US at the beginning of this year and has since moved at lightning speed to eclipse Germany's once indomitable export machine. It shipped $111bn (£54bn) worth of goods in August, up 55pc from a year earlier. Now boasting 8pc of global exports – three times the Britain's dwindling share – China has jumped up the technology ladder. Machinery, equipment and cars now make up 46pc of total exports, while textiles are fading from the picture.
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