New York gold futures rise as stocks plunge

Special Report:Global Financial Crisis

CHICAGO, Feb. 10 (Chinese media) -- The New York gold market behaved impressively on Tuesday. Gold futures for April delivery rose 21.40 U.S. dollars, or 2.4 percent, to 914.20 dollars an ounce on the New York Mercantile Exchange.

The disappointment off the Treasury Secretary Timothy Geithner's presentation undermined the stock market and that in turn pushed the gold market up to an even higher level. Mr. Geithner warned that it will take time for the administration's bank-rescue plan to bear fruit. The Dow Jones Industrial Average declined 381.99 points, or 4.6 percent, to 7,888.88.

The gold market was being lifted by a combination of flight to quality and inflation, even though the inflation argument was somewhat countervailed by the weakness in the U.S. equity market and by the weakness in the energy complex.

However, the Treasury's 32 billion dollars 3-year notes go off well suggest that the U.S. will be able to borrow more and perhaps create even more money and to many traders that is inflationary.