Gold prices inched lower again in early trading on Monday, giving back a little more of last Thursday's massive rally. Trading took place amid the release of details of a new government plan to subsidize private investors' purchase of toxic assets on the books of troubled banks.
April-dated gold fell to $947.50, down $8.70 for the session. Prices dipped as low as $947.20 after earlier trading at $958.10.
The Obama administration released details Monday of its latest plan to solve the massive, debilitating banking crisis which continues to hold the financial system in its crushing grip.
The Treasury's response involves using up to $100 billion in funds from the $700 billion financial rescue plan passed in 2008 in addition to capital from private investors to generate an estimated $500 billion to purchase the toxic assets, a number that could double to $1 trillion over time, the Treasury said.
The dollar remained on the defensive versus the euro and sterling, but advanced against the yen after Japan's Finance Minister said that a massive government stimulus package would be necessary to prevent the current fiscal quarter from repeating the 12.1% economic contraction seen in the fourth quarter of 2008.
Despite dropping in four of the five sessions this week, gold finished up $26.20 or 2.8%. Gold soared $68.70 on Thursday amid worries of inflation after the Federal Reserve's plan to buy as much as $1.15 trillion in bonds was revealed the day before.
Meanwhile, on the economic front, the National Association of Realtors is scheduled to release its report on existing home sales for February at 10 AM ET. Economists estimate existing home sales of 4.45 million for the month.
For comments and feedback: contact email@example.com