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Gold futures on the COMEX Division of the New York Mercantile Exchange ended higher for the fourth session on Friday, buoyed by the record low interest rate and a weak dollar. Silver and platinum went up, too. Gold price for August delivery gain US$1.50 (0.2%) closing at US$ 941oz. It is the first time for the yellow metal stands above US$940 in almost three weeks despite profit-taking ahead of weekend pared the gains after the contract touched its intraday high of US$949. Savvy market observers say that Gold’s appeal of hedging inflation continued being fueled after the Fed Reserve decided on Wednesday to keep the benchmark interest rate at a record low level between zero and 0.25% “for an extended period.” In response to a report released by People’s Bank of China, the US$ went down and provided some bullish support to the precious metal earlier in the session. The Chinese central bank reiterated that it will push the reform of the international currency system to make it more diversified and lessen US$’s role as the world’s reserve currency. September Silver finished at US$14.156 oz, up 12.4 cents. October Platinum rose US$13.70 to US$1,210.70 oz.

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The US economy contracted slightly less than initially estimated in the Q-1, while corporate profits rebounded, according to a government report on Friday that hinted the recession was moderating. Gross domestic product, which measures total goods and services output within US. borders, dropped at a 5.7 % annual rate, the Commerce Department said, less than the 6.1% estimated by the government last month. The economy contracted at a 6.3% pace in Q-4. While the drop in economic activity was still steep and slightly worse than market expectations for a 5.5% fall, recent data have indicated that the rate of the slowdown was easing and growth could resume by year-end. Output has declined for three straight quarters for the first time since 1974-1975. “The recession is easing. The second quarter is shaping up to be a smaller decline of about 3.0 to 3.5%. It should be the last of the negative quarters,” said Christopher Low, chief economist at FTN Financial in New York.

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Stephen Friedman, chairman of the New York Federal Reserve Bank’s board of directors, resigned last Thursday amid questions about his purchases of stock in his former firm, Goldman Sachs. Mr. Friedman, a retired chairman of Goldman Sachs who has led the New York Fed’s board since January 2008, said he quit to prevent criticism about his stock buying from becoming a distraction as the Fed battles a severe US recession. “Although I have been in compliance with the rules, my public service motivated continuation on the Reserve Bank Board is being mischaracterized as improper,” he said in a letter of resignation to New York Fed President William Dudley. “The Federal Reserve System has important work to do and does not need this distraction,” Friedman said.

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The recession has turned American teenage shoppers, one of the US’s most powerful spending groups, into penny pinchers, hurting higher-priced teen shops, while other stores that feature “non labels”, sales and deep discounts are benefiting from this change. According to the New York Times: “This spring, spending by teenagers, a closely studied but rarely understood segment of the population, is off by 14%, a direct reflection of the economy, according to a report this month by the investment bank Piper Jaffray.” The evidence is more than statistical, “‘Labels are becoming less and less of a priority for people throughout my school,’ said Chelsea Orcutt, a high school senior.

Popularity: 5% [?]

US President Barack Obama warned credit-card issuers they will face new regulations and scrutiny to keep consumers from being hit by “unfair” rate increases and abusive fees and penalties. Obama said he told 13 executives from the industry, including representatives from Charlotte, North Carolina-based Bank of America Corp. and New York-based American Express Co. that while credit cards are an important source of finance for families and small businesses, consumers too often must negotiate confusing terms that end up costing them more money than they expected. “The days of any time, any reason rate hikes and late fee traps have to end,” Obama said after meeting with the executives yesterday at the White House. “No more fine print, no more confusing terms and conditions.” Card issuers are under fire for policies that impose large late fees and boost interest rates on delinquent customers amid higher unemployment and a recession. The Federal Reserve already has issued new rules, due to take effect in 2010. Lawmakers in the US House and Senate also are considering legislation to provide more consumer protections. American Bankers Association President Ed Yingling, who was among those at the meeting, said afterward that Obama was “very clear” about his desire to make disclosures easier to understand and about the practices he wants ended.

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Crude Oil prices fell alongside the broader markets last week on the limited details released about a Treasury Department program to raise more than US$1T in public and private funds to free up credit markets. The Dow Jones industrials lost 400 pts after Treasury Secretary Timothy Geithner announced the rescue plan last Tuesday, and light, sweet crude for March delivery sank by US$2.01 bbl to settle at US$37.55bbl on the New York Mercantile Exchange. US President Barack Obama’s US$838B economic recovery plan, which was approved by the US Senate did little to reverse Crude Oil’s downturn. Phil Flynn, an analyst at Alaron Trading Corp., said investors appear concerned about the inflationary effects of massive government spending.

Popularity: 6% [?]