GOLD—April gold prices trended down to a 5-week low from their recent 11-1/2 month high.
Bearish factors include (1) liquidation of long gold positions to cover margin calls from the plunge in the equity market,
(2) the rally in the dollar index to a 2-3/4 yr high, and (3) the deflationary impact of global deleveraging with commodity indexes near recent 3-1/2 yr lows. Bullish factors include (1) safe-haven demand buying as concern grows that the worldwide recession may deepen and further exacerbate equity market losses, (2) the Gold Council’s report that central bank gold sales fell -42% in 2008, and (3) stagnant gold mine production since 1998. Large specs cut their large long positionto 159,293 as of Mar 3. The Gold Council reported that overall Q4 gold demand rose +26% y/y to 1,037 MT, Q4 jewelry consumption fell -6% y/y, Q4 industrial demand fell -10% y/y and Q4 gold supply rose +5% y/y to 980
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