Gold futures rise as U.S. dollar trades mixed Gold futures rose nearly 2% early Thursday, gaining as the U.S. dollar traded mixed against other major currencies. Gold for August delivery gained $10.40 to $903.90 an ounce on the New York Mercantile Exchange. The metal earlier hit an intraday high of $910.50. "Given rising inflation concerns we continue to anticipated increasing investment demand on dips, as reflected by the recent increase in ETF holdings, but the metal still has to overcome chart resistance," said James Moore, analyst at TheBullionDesk.com. In a note to clients, he pegged this resistance range at $897 to $904.50 an ounce. Assuming that level is cleared, Moore said he expects "upside momentum to pick up quickly, with gold pushing back to the $945 area."
Gold May Rise to $5,000 on Inflation Gold prices may rise to $5,000 an ounce as investors seek to protect themselves against accelerating inflation, said Schroder Investment Management Ltd., which oversees $277 billion of assets globally. ``You could easily see for the next several years that prices rise not to $1,000 an ounce, but prices rise to $5,000 an ounce or beyond as inflation psychology becomes more and more embedded and people become desperate to have a source of value,'' said Christopher Wyke, London-based emerging market debt and commodities product manager at Schroder, which oversees about $10 billion of commodity assets. Investors are turning to gold for protection as two-thirds of the world's population cope with inflation rates that are climbing to more than 10 percent, Wyke said.
Ohio banks bear the brunt of regionals' woes Write-downs haunt amid falling home values as takeover prospects look muted. As the saga of the subprime mortgage mess and tanking housing market continues to play out at regional banks nationwide, perhaps no state has seen more concentrated banking pain than Ohio. As of the beginning of June, in the last 12 months National City had lost almost 70% of its value, Huntington fell more than 40%, Fifth Third was down 20% and KeyCorp dropped more than 20%. Fifth Third's moves were being read by Wall Street as a sign of things to come both in Ohio and nationwide, some analysts said Wednesday.
Factories slump in Philly as prices soar Factories in the Philadelphia region are being slapped by weaker demand on one side and higher input costs on the other, the Federal Reserve Bank of Philadelphia reported Thursday. The Philly Fed index fell to negative 17.1 from negative 15.6 in May, with the prices-paid index rising to its highest level since 1980 at 69.3 Economists expected the index to improve slightly to negative 12. The new orders index fell to negative 12.4 in June from negative 3.7. Shipments, inventories, unfilled orders and employment indexes all fell. In a special question, 65% of firms said they expect to raise their prices in the next few months because of higher input costs.
Cereal, Sugar, Poultry Price Gains to Top Forecasts, USDA Says The price of cereals, baked goods, sweets and poultry will rise this year by more than expected a month ago because of accelerating costs for grain and fuel, the U.S. Department of Agriculture said. The annual gain for cereals and baked goods will be 9 percent to 10 percent, up from 7.5 percent to 8.5 percent forecast in May and the most since 1980, the USDA said in a report set for release tomorrow. The estimate doesn't reflect flood damage to Midwest crops, which will be included in the July report, the USDA said. Retailers are passing along higher prices to consumers as global demand for food boosts U.S. exports, production is disrupted by harsh weather and more crops are used to make fuel, the USDA said. Corn, wheat, soybeans and rice have reached records this year, while beef, pork and chicken prices rallied.
Rising mortgage rates add to housing woes Rising mortgage rates, reflecting higher inflation, are starting to compound the US housing market's woes. Since March, mortgage rates have climbed as much as a full percentage point. For someone borrowing, say, $400,000, that could tack an extra $320 onto the monthly payment. The implications of rising mortgage rates are not good, say economists and mortgage industry specialists. With the housing market still very weak, higher mortgage rates will act like a brake on any recovery in the sector. A hobbled housing market, moreover, means the economy as a whole will remain weak. "The housing market needs to recover for the economy as a whole to fully recover," says Lawrence Yun, an economist at the National Association of Realtors in Washington. "Without housing recovering, the economy will remain sluggish."
Paulson to Push for More Power for Fed U.S. Treasury Secretary Henry Paulson is expected to urge that the Federal Reserve be given new powers to regulate Wall Street after the collapse of brokerage Bear Stearns, U.S. media reported on Wednesday. In a speech to be delivered on Thursday, Paulson will say that the fall of Bear Stearns has expedited the need for the government to address the "outdated" regulatory oversight structure while not intervening too much in the functioning of markets, The Wall Street Journal and The Washington Post said. "We should quickly consider how to most appropriately give the Fed the authority to access necessary information from highly complex financial institutions and the responsibility to intervene in order to protect the system, so they can carry out the role our nation has come to expect - stabilizing the overall system when it is threatened," Paulson will say, according to prepared remarks obtained by the newspapers.
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