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NEW YORK (Reuters) - Equity markets slid anew and gold set a second-straight record high on Friday as fears of a possible U.S. slide into recession and concerns related to Europe's debt crisis kept investors on edge.

Wall Street marked a fourth week of losses, pulled lower by a 20 percent plunge in Hewlett-Packard (HPQ.N: Quote, Profile, Research, Stock Buzz) -- its worst day since the 1987 market crash -- after the Silicon Valley icon unveiled a dismal outlook and a difficult corporate shake-up.

The benchmark S&P 500 index has shed 13.1 percent so far in August and is on track for its worst month since October 2008, when the financial crisis and deep recession mauled markets.

The day's activity seemed mild when compared with Thursday, when the yield on 10-year U.S. government bonds plummeted below 2 percent for the first time since at least 1950 on fears the U.S. economy was careening toward a new recession.

Those fears appear valid. Bill Gross, manager of the world's largest bond fund at PIMCO, told Reuters Insider that the week's rally in Treasury yields signaled "not only a potential for a recession but the almost high probability of recession."

The Dow Jones industrial average .DJI closed down 172.93 points, or 1.57 percent, at 10,817.65. The Standard & Poor's 500 Index .SPX fell 17.12 points, or 1.50 percent, at 1,123.53. The Nasdaq Composite Index .IXIC lost 38.59 points, or 1.62 percent, at 2,341.84.

Investors halted a rush into bonds but kept pouring into gold, which posted its biggest one-week gain in 2-1/2 years and remains on track for its biggest one-month rise in nearly 12 years in August. Bullion is up 30 percent so far this year.

While rising commodity prices sapped some safe-haven buying of gold, it has gained 6 percent over the past five days.

"Right now, gold is inversely correlated with fear and nothing else. When stocks are down, gold's up," said Frank McGhee, head precious metals trader at Integrated Brokerage Services LLC.

Spot gold shot to a record $1,877 an ounce on volume that was the week's highest but below last week's pace.

U.S. gold futures for December delivery settled up $30.20 at $1,852.20 an ounce.

Commodity prices rebounded after the U.S. dollar plumbed a record low against the yen on speculation Japanese authorities will not intervene too much to halt the yen's surge.

The dollar fell as low as 75.941 yen on trading platform EBS, but later pared most losses. It last traded at 76.500 yen, down 0.1 percent.

Currency traders were emboldened by a Wall Street Journal report citing Japan's top currency official as saying Japanese authorities do not plan to intervene in the market often.

The dollar's slump turned commodity markets, where crude oil prices rose about 2 percent at one point. ICE Brent October crude closed up $1.63 at $108.62 a barrel. U.S. crude oil settled down 12 cents at $82.26 per barrel.

The U.S. dollar index .DXY slipped 0.4 percent to 73.976. The euro was up 0.4 percent at $1.4392.

U.S. stocks at first see-sawed but turned lower by midday as European stocks closed down on recession fears and skittishness about regional bank funding in Europe.

"What I'm seeing right now is basically a crisis of confidence, more-so than an economic crisis or financial crisis necessarily at this stage," said Natalie Trunow, chief investment officer of equities at Calvert Investment Management in Bethesda, Maryland, which manages about $14.8 billion.

MSCI's all-country world stock index .MIWD00000PUS was off 1.6 percent, while emerging markets stocks .MSCIEF fell 2.5 percent.

European shares flirted with two-year lows. The FTSEurofirst 300 .FTEU3 index of top European shares closed down 1.7 percent at 909.79.

U.S. Treasury yields inched up from a low of 1.97 percent on Thursday as some investors took profits.

The benchmark 10-year U.S. Treasury note was up 1/32 of a point in price to yield 2.06 percent.

Yields have dropped about 73 basis points on the 10-year note in August as disappointing economic data, the Federal Reserve's low interest rate policy and jitters over rising bank funding costs have driven investors to safe-haven bonds.

Investors are awaiting Federal Reserve Chairman Ben Bernanke's speech on August 26 in Jackson Hole, Wyoming, for hints on how policymakers plan to address the weakness in the economy.

(Reporting by Rodrigo Campos,

Gertrude Chavez-Dreyfuss and Karen Brettell

in New York; Barbara Lewis and Jan Harvey in London;

Harro ten Wolde in Frankfurt; Writing by Herbert Lash;

Editing by Dan Grebler)

Global stocks slide anew, gold sets fresh record,
R,
19.8.2011,
http://www.reuters.com/article/2011/08/19/
us-markets-global-idUSTRE7725BC20110819

A Block Abuzz

With the Business of Gold

August 17, 2011

The New York Times

By COREY KILGANNON

On Tuesday morning, Arnie and Laura Goldstein, a retired couple from Rego Park, Queens, took some gold jewelry they had been saving for years to the incredible trinket bazaar that is the diamond district in Midtown Manhattan.

“Things I don’t wear anymore,” Mrs. Goldstein said, folding a stick of chewing gum into her mouth and eyeing a daunting array of hawkers on the block of West 47th Street between Fifth Avenue and Avenue of the Americas.

Mr. Goldstein, a retired New York City schoolteacher, said they hoped to get about $7,500 for the pieces. “We’ve been holding on to them for years,” he said.

“Years,” Mrs. Goldstein added.

“And now that the gold price is up,” Mr. Goldstein said, “we figured we’d come in and see what we could get.”

The price of gold is indeed up. It soared to an all-time high last week, not adjusted for inflation: over $1,800 an ounce for pure 24-karat gold. The spike has set off a flurry of sales in the diamond district, which has become flooded with people like the Goldsteins looking to sell high.

“This is a gold rush,” said Ernie Velez, 48, a jeweler and an owner of Universal Refinery, a glass-counter booth in one of the many mini-mall exchanges on the block where jewelry is bought and sold. Mr. Velez, an immigrant from Ecuador, said things could get even busier.

“A lot of folks are selling, but also a lot of people think the price will keep going up,” he said as jewelers brought small piles of gold jewelry to his counter for estimates. Mr. Velez’s men rasped the pieces on smooth test stones and then dabbed nitric acid on the rubbed-off gold to determine its purity.

Outside, Ramon Barrenechea, 59, of Staten Island, was capitalizing on the rush in his own way. Mr. Barrenechea, an immigrant from Peru, makes his own flat test stones by hand and was selling them for more than $50.

The diamond district does not particularly need a gold rush to invigorate its sidewalks. The block always percolates with business and energy.

About $24 billion is exchanged each year in sales in and around the district, among roughly 3,000 businesses, said Michael Toback, an executive board member of the 47th Street Business Improvement District and an owner of Myron Toback, a jewelry supply and refinery business on the block.

Amid all this industry, the district can be one of the strangest places in the city. Near Fifth Avenue on Tuesday, a scruffy bear of a man with no shirt on was scooping up rainwater and giving himself a cat bath as passers-by stared.

Hawkers from kosher delis handed out menus. One could hear New York accents, as well as Russian and also Yiddish, spoken by the many Hasidic men who work here, in black hats and coats.

Some of the most colorful characters were the hawkers: street-savvy men hired by jewelry dealers to spot potential customers on the block and coax them into their shops. The surging price of gold has cranked up the metabolism of these figures: the swaggering, smooth-talking sidewalk representatives for the many businesses.

“We’ve had a lot more action the past couple weeks,” said a 51-year-old hawker named Al, who wore a “We Buy Gold” sign around his neck and courted customers by showing a piece of paper listing the latest prices for 24-karat and lesser gold. “Business has been good.”

Al would not give his last name (“I got grandkids — I don’t want them to know I do this”) but said he tells customers that gold prices were so high that he was selling rings off his fingers.

“I tell people, ‘I had a ring I bought for $40 back in the day, and I just sold it for $200,’ ” he said.

Not all hawkers were as cheerful, complaining that sales were not brisk enough, even as they still quoted prices as high as $1,790 an ounce on Wednesday morning.

“A lot of people know what they have, and they’re waiting to see if they can sit on it longer, for a better offer,” said Denis Garasimov, who said he was hawking for Diamond District Gold Buyers. “It’s a straight-out gamble right now.”

Victor Velez, 38, an immigrant from the Dominican Republic who held a laminated “We Buy Gold” sign, nodded as he handed out cards for the Royal Gems Corporation.

“A lot of people are holding on to it because they are seeing how high it can go,” Mr. Velez said.

When the Goldsteins first set foot on the block, they were approached by a hawker named Anthony Palmer, 47, of Springfield Gardens, Queens. Mr. Palmer, who works a small patch of sidewalk near Avenue of the Americas, said he earns $100 a day from the company he works for, and sometimes receives tips from customers happy with the price they get for their gold.

“You see there’s no other hawkers in this spot but me — this is my fiefdom,” he said. “That’s how it works. We respect each other’s space. When you get rogue hawkers cutting in, sometimes you got to be forceful.”

The surge in gold prices is attracting more traffic, he said, but when it comes to selling gold, personal needs often trump market price.

“It really ebbs and flows on people’s own economics,” he said. “You get desperate people at the beginning and the end of the month, when they’re facing their bills.”

A Block Abuzz With the Business of Gold, NYT, 17.8.2011,
http://www.nytimes.com/2011/08/18/nyregion/as-gold-soars-diamond-district-hawkers-lure-sellers.html

Factbox:

Gold milestones

on the road to record high

Wed Apr 20, 2011
8:44am EDT
Reuters

(Reuters) - Gold struck a record high on Wednesday at slightly above $1,500 an ounce as a weak dollar buoyed sentiment in precious metals.

Following are key dates in gold's trading history since the early 1970s:

* August 1971 - U.S. President Richard Nixon takes the dollar off the gold standard, which had been in place with minor modifications since the Bretton Woods Agreement of 1944 fixed the conversion rate for one Troy ounce of gold at $35.

* August 1972 - The United States devalues the dollar to $38 per ounce of gold.

* March 1973 - Most major countries adopt floating exchange rate system.

* May 1973 - U.S. devalues dollar to $42.22 per ounce.

* January 1980 - Gold hits record high at $850 per ounce. High inflation because of strong oil prices, Soviet intervention in Afghanistan and the impact of the Iranian revolution prompt investors to move into the metal.

* August 1999 - Gold falls to a low at $251.70 on worries about central banks reducing reserves of gold bullion and mining companies selling gold in forward markets to protect against falling prices.

* October 1999 - Gold reaches a two-year high at $338 after agreement to limit gold sales by 15 European central banks. Market sentiment toward gold begins to turn more positive.

* February 2003 - Gold reaches a 4- year high on safe-haven buying in the run-up to the invasion of Iraq.

* December 2003-January 2004 - Gold breaks above $400, reaching levels last traded in 1988. Investors increasingly buy gold as risk insurance for portfolios.

* November 2005 - Spot gold breaches $500 for the first time since December 1987, when spot hit $502.97.

* April 11, 2006 - Gold prices surpass $600, the highest point since December 1980, with funds and investors pouring money into commodities on a weak dollar, firm oil prices and geopolitical worries.

* May 12, 2006 - Gold prices peak at $730 an ounce with funds and investors pouring money into commodities on a weak dollar, firm oil prices and political tensions over Iran's nuclear ambitions.

* June 14, 2006 - Gold falls 26 percent to $543 from its 26-year peak after investors and speculators sell out of commodity positions.

* November 7, 2007 - Spot gold hits a 28-year high of $845.40 an ounce.

* January 2, 2008 - Spot gold breaks above $850.

* March 13, 2008 - Benchmark gold contract trades over $1,000 for the first time in U.S. futures market.

* March 17, 2008 - Spot gold hits an all-time high of $1,030.80 an ounce. U.S. gold futures touch record peak of $1,033.90.

* September 17, 2008 - Spot gold rises by nearly $90 an ounce, a record one-day gain, as investors seek safety amid turmoil on the equity markets.

* Jan-March 2009 - Gold-backed exchange-traded funds report record inflows in the first quarter as financial sector insecurity spurs safe-haven buying. Holdings of the largest, the SPDR Gold Trust, rise 45 percent to 1,127.44 tonnes.

* February 20, 2009 - Gold rises back above $1,000 an ounce to a peak of $1,005.40 as investors buy bullion as a safe store of value as major economies face recession and equity markets tumble.

* April 24, 2009 - China announces it has raised its gold reserves by three-quarters since 2003 and now holds 1,054 tonnes of the precious metal, boosting expectations it may add further to its reserves.

* August 7, 2009 - European central banks opt to renew their earlier agreement to limit gold sales over a five-year period, setting the sales cap at 400 tonnes a year.

* September 8, 2009 - Gold breaks back through $1,000 an ounce for the first time since February 2009 on dollar weakness and concerns over the sustainability of the economic recovery.

* December 1, 2009 - Gold climbs above $1,200 an ounce for the first time as the dollar drops.

* December 3, 2009 - Gold hits record high at $1,226.10 an ounce, with dollar weakness and expectations for central banks to diversify reserves into gold driving prices higher.

* May 11, 2010 - Gold reaches fresh record high above $1,230 an ounce as fears over the contagion of debt issues in the euro zone fuel safe-haven buying.

* June 21, 2010 - Gold jumps to a new high at $1,264.90 an ounce as underlying fears over financial market stability and sovereign risk combine with dollar weakness to push the metal through resistance at its previous high.

* Sept 14, 2010 - Gold climbs back to record highs, this time at $1,274.75, as global markets reflect renewed uncertainty on the economic outlook.

* Sept 16-22, 2010 - Gold hits record highs for five successive sessions, peaking at $1,296.10, as investors flock to bullion after the Fed signals it may consider further quantitative easing, weakening the dollar and raising fears over future inflation.

* Sept 27 - Spot gold prices touch the $1,300 an ounce mark for the first time.

* Oct 7 - Gold rallies to a record high above $1,360 an ounce as the dollar comes under pressure from building expectations for the U.S. Federal Reserve to take extra measures to keep interest rates low and prop up the economy.

* Oct 13 - Gold jumped to record highs near $1,375 an ounce as the dollar continued to languish, with the U.S. unit coming under pressure after minutes from the Fed's September meeting signaled the U.S. economy may need further stimulus.

* Nov 8 - Gold prices break through the $1,400 an ounce mark for the first time as haven buying prompted by renewed budget problems in Ireland more than offset a sharp dollar bounce.

* Dec 7 - Gold reaches a fresh record high above $1,425 an ounce, driven by fund buying ahead of year-end, jitters over the euro zone debt crisis and speculation for further U.S. monetary easing.

* January 2011 - Gold prices fall more than 6 percent in their worst monthly performance in over a year as a revival in risk appetite diverts investment to higher-yielding assets.

* March 1 - Gold recovers to hit a record high at $1,434.65 an ounce as unrest in Tunisia and Egypt spreads across the Middle East and North Africa, boosting oil prices.

* March 7 - Gold extends record highs to $1,444.40 an ounce as oil prices hit their highest in 2- years after protests are quashed in Saudi Arabia and as violence in Libya rages.

* March 24 - The resignation of Portuguese prime minister Jose Socrates pushes the euro zone debt crisis back to center stage, lifting gold prices to a record above $1,447 an ounce.

* April 20 - Gold climbed to a record high at $1,500.16 an ounce, supported by a weak dollar and concerns over a sovereign debt crisis.

(Compiled by Atul Prakash, Jan Harvey,

Himani Sarkar and Amanda Cooper)

    Factbox: Gold milestones on the road to record high, R, 20.4.2011,
    http://www.reuters.com/article/2011/04/20/
    us-precious-milestones-idUSTRE73J0PF20110420

Gold rises to record

above $1,440 on Mideast unrest

NEW YORK/LONDON | Wed Mar 2, 2011
12:58pm EST
By Frank Tang and Jan Harvey

NEW YORK/LONDON (Reuters) - Gold rose to a record high for a second straight day on Wednesday, breaching $1,440 an ounce as political unrest in Libya and surging oil prices prompted investors to pile in.

Unrest across the Middle East and North Africa, which unseated leaders in Tunisia and Egypt before spreading to Libya, Bahrain, Yemen, Oman and Iran, fueled safe-haven buying on fears that tensions could flare across the entire region.

"You have political problems all over the world, a Federal Reserve bank that still erred on the side of easing rather than tightening, rising commodities prices in general, and growing disdain for fiat currencies generally," said Dennis Gartman, author of the Gartman Letter, an daily investment newsletter.

"It will be illogical for gold not to be going higher," he said.

Two U.S. warships were passing through the Suez Canal on Wednesday, heading for the waters off Libya to pressure that country's ruler, Muammar Gaddafi, to step down. Gaddafi launched a land and air offensive to retake territory from rebels in Libya's eastern region.

At a meeting of Arab foreign ministers in Cairo on Wednesday, Iraqi Foreign Minister Hoshiyar Zebari said the Libya crisis is an internal Arab affair and foreign powers should refrain from any intervention.

RECORD TERRITORY

Spot gold rose 0.4 percent to $1,439.19 an ounce by 12:00 p.m. EST, after peaking at an all-time high of $1,440.10. The metal fixed at $1,435.50 an ounce in London.

U.S. gold futures for April delivery rose $7.90 to $1,439.10.

Gold is building on a 6 percent rise in February, its biggest one-month climb since August.

World stocks declined as unrest in the Middle East and North Africa drove up oil prices and pushed investors into safer assets.

Rising oil prices will support gold's status as an inflation hedge, analysts said, if they appear to curb global growth. "They could very well impact (growth in) Europe, the United States as well, and indeed China," said VM Group analyst Carl Firman.

"That will give rise to uncertainty, it will lower demand predictions for, for instance, copper, and where it knocks industrial metals and equities, gold will probably benefit," he said.

U.S. crude futures rose above $101 a barrel as escalating violence in Libya threatened the OPEC nation's oil infrastructure and markets braced for a potentially prolonged disruption.

Federal Reserve Chairman Ben Bernanke said on Tuesday the surge in oil prices is unlikely to hurt the U.S. economy, boosting gold as he offered no hint that the U.S. central bank was considering winding down its loose monetary policy.

RISK APPETITE WANES

Violence in the region cooled appetite for higher-risk assets such as stocks and boosted so-called safe havens like German government bonds, the Swiss franc and gold.

Silver rose to a peak of $34.96 an ounce, its strongest level since early 1980. It later rose 0.4 percent to $34.79 an ounce.

Holdings in the world's largest silver exchange-traded fund, the iShares Silver Trust, rose to 10,693.68 tones on March 1, their highest since January 14.

The trust reported a slight recovery in its holdings last month after they posted their biggest ever one-month fall in January.

Platinum gained 0.9 percent to $1,855.49 an ounce and palladium climbed 0.4 percent to $817.47.

Prices at 12:13 p.m. EST.

(Reporting by Frank Tang and Jan Harvey;

editing by Jim Marshall)

    Gold rises to record above $1,440 on Mideast unrest, R, 2.3.2011,
    http://www.reuters.com/article/2011/03/02/
    us-markets-precious-idUSTRE71G2KM20110302

Funds boost gold ETFs to record

Fri Feb 13, 2009
9:52am EST
Reuters
By Frank Tang - Analysis

NEW YORK (Reuters) - Investors expecting years of inflation and global economic instability are pouring money into securities backed by gold bullion, helping turn a simple safe haven into a mainstream asset class.

SPDR Gold Trust GLD.PGLD.A, popularly known as GLD, said the gold bullion it owned rose by more than 100 tonnes to 970.57 tonnes as of Thursday, which marked the biggest weekly gain in the history of the gold-backed exchange-traded fund.

However, fund managers say that setbacks in the price of gold are possible following a sharp rally when investors small and large are piling into the yellow metal.

GLD is now the second biggest U.S. ETF, with market value of $27.5 billion, which ranks it behind only the popular SPDR S&P 500. GLD currently owns more gold bullion than the government of Japan, according to the World Gold Council.

Holdings of COMEX Gold Trust IAU.P, another U.S. gold ETF, also climbed to a record high 70 tonnes on Friday.

Diversification into gold out of traditional asset classes, such as stocks, bonds and currencies, by many sizable non-gold investment funds has fueled GLD's rally. Some pension funds and advisors to wealthy investors are now recommending 5 to 7 percent allocation toward gold and gold stocks.

"More and more generalist money managers are looking at gold. A lot of money mangers find comfort with the idea of owning gold via GLD. It's quite convenient to own the GLD, versus having to pay warehouse costs on your own," said Brian Hicks, co-manager of the $500 million Global Resources Fund at Texas-based U.S. Global Investors.

Gold ETFs are listed on stock exchanges and offer investors exposure in bullion without taking physical delivery. Sponsors of the funds buy a matching amount of physical gold and keep it in bank vaults.

Hicks' fund currently owns more than 4 percent of GLD, which is the largest single position of his fund.

U.S. gold futures for April delivery climbed on Thursday above $950 an ounce, the loftiest level since July. They traded at $940 on Friday, but have still risen almost 20 percent from their low in January.

GOLD AS LONG-TERM INFLATION HEDGE

The furious rally in bullion stems from the inflationary expectation arising from the U.S. government's need to borrow more than $2 trillion to finance a bank rescue plan and to enact an aggressive package to stimulate the world's biggest economy and help reverse a global slowdown.

"The government does not know what it is doing, but it's doing a lot to it. It's just a matter of time for the Federal Reserve to come in to inflate the system," said Axel Merk, portfolio manager of California-based Merk Mutual Funds, which have more than $310 million of assets.

"It (gold) is moving more toward the mainstream. There are retail investors, but it is also becoming part of the asset allocation of larger fund managers having a portion in gold. That also shows me that we are far away from the top of the gold market," Merk said.

There was recent market talk about a shortage of physical gold bullion as more investors turned to gold as a safe haven.

However, George Milling-Stanley, manager of investment and market intelligence of WGC, which helped launch GLD in 2004, said there was "not any problem whatsoever" for GLD's authorized dealers to acquire gold bars to create new shares.

Dennis Gartman, independent investor and author of the daily Gartman Letter, said that the low yield of currencies and U.S. Treasury bonds because of stimulus plans by central banks made gold -- which produces no interest -- more attractive.

However, Gartman also said the price of gold could easily retrace back to the $920 level because of over-extended buying in too short a period of time.

"It's a little worrisome that so many people are piling in," Gartman said.