Precious Metals Open On A High Note Still Close In Red

Greenback On Weak Footing Against Majors

Gold rose $6.95 to $896.55 in Asia on Thursday before it fell to $863.10 by late morning in New York on news the US financial bail-out package is almost agreed. The prices then rallied $13.10 in the last couple of hours of trade but still ended with a loss of 1.57% for the session.

The greenback continued to trade on weak footing against the majors, mired beneath the 106-level versus the yen and trading near 1.4675 against the euro as the Bush Administration $700 billion bailout plan encountered gridlock in Congress. Amid the ongoing financial turmoil, markets will pay close attention to the results of the Congressional deliberations on the rescue plan in the coming days.

Further increasing the selling pressure on the dollar was earlier reports of the largest bank failure in US history, when it was announced that the assets of Washington Mutual was seized by the government on grounds that it had insufficient liquidity. JP Morgan Chase agreed to acquire Washington Mutual $1.9 billion in deposits.

Reports from the US reinforced the dire state of the economy, with new home sales down sharply by 11.5% to 460k units versus 515k units previously, its worst level in 17-years. Durable goods orders also fell sharply, posting a 4.5% decline compared with a 1.3% increase a month earlier while the core durable goods orders declined by 3.0% versus a 0.7% increase from July. Meanwhile, weekly jobless claims spiked up to 493k, versus 455k a week prior