Gold Falls as Illusion of Safety Permeates Investors

The attempted government bailouts around the world, along with announcements by major economic powers that they are going to prop up the failed global banking systems, has many investors seeing stars, while bringing the illusion of safety.

Those factors are keeping gold from moving upward over the last several days, and is putting downward pressure on the metal instead.

December delivery for gold dropped $16.50 to end the session at $842.50 an ounce on the Comex division of the New York Mercantile Exchange. This is the third straight trading day gold has fallen.

In an unprecedented move, some major central banks announced they'll be working together with the Federal Reserve to offer auctions for unlimited U.S. dollar funds. In the past the funds were capped. This is an attempt to ease up the credit crisis and put liquidity back into the market.

The Dow also enjoyed an expected rebound today, as it broke the all time record for a point gain in a day, surging by 936 points, finishing the day at 9387.61

With all the government interference across the world, gold will probably swing up and down in big ways from day to day, as the uncertainty and almost daily announcements by central banks and governments leave investors unsure where things will go.

Any smart investor should know that much of what is happening now are moves related more to PR than it is to practical help. It's to soothe the fears of people rather than make any true positive impact.

History has shown that government interference only prolongs the pain, not helps ease it.

Gold is ready on the sidelines waiting for any excuse for investors to run to it for safety. I don't think its run up is anywhere near over, but the interference in the market makes it much harder to measure.

Silver Edges Up as Federal Reserve Cuts Rates by Half a Point

Silver is up slightly as of noon EST, as the news of the half point rate cut by the U.S. Federal Reserve and several other central banks around the world gave it a temporary spike before settling down.

In the U.S., prime rates were cut to 1.5 percent. Also approved by the Fed was a halp point cut in the discount rate to 1.75 percent.

Other banks cutting rates were the European Central Bank, which dropped it rates from 3.75 percent from 4.25 percent. The Bank of England trimmed their rates from 5 percent to 4.5 percent. Other central banks cutting rates were the swiss National Bank, The Bank of Canada and the Swedish Riksbank.

At mid-day, silver is up by 0.19 to $11.75 an ounce.

Gold Futures Up by $25 after U.S. Federal Reserve Rate Cut

The cut by the U.S. Federal Reserve and several other central banks around the world helped gold futures rally again today, as at noon EST it was up by almost $25 an ounce to $911.80.

Investors have started to move their capital to the safe haven of gold as the U.S. dollar is starting to show signs of weakness after a period of strength.

U.S. Federal Reserve rates now stand at 1.5 percent, with the discount rate also dropping by half a point to 1.75 percent.

Other banks cutting rates were the European Central Bank, which dropped it rates from 3.75 percent from 4.25 percent. The Bank of England trimmed their rates from 5 percent to 4.5 percent. Other central banks cutting rates were the Swiss National Bank, The Bank of Canada and the Swedish Riksbank.

Now with more cuts hinted they're on the way, we should see gold start to make the upward run that has been expected for some time.