Price falls on pessimism that rally can last
Gold fell Tuesday as traders begin to doubt that prices can stay near the high they reached this summer.
Credit Suisse analyst Ric Deverell released a report Tuesday saying the commodities market has entered a “dangerous new phase.”
Mr. Deverell said this summer’s rally in gold seems to have been overheated. Gold has been overlooked as an investment in part because more traders want park their money in U.S. Treasury securities, which many consider as safe as gold and easier to cash in when needed, he wrote. The popularity of Treasurys took the wind out of gold’s rally this month, Mr. Deverell said.
Gold for December delivery fell $41.70, or 2.5 percent, to $1,616 an ounce. December silver lost 95.6 cents, or 3 percent, to close at $29.839.
Gold hit a high of $1,891.90 an ounce Aug. 22. It’s down 14 percent since early September. Silver is down 31 percent.
Businesses ordered more long-lasting goods
Businesses ordered more computers, communications equipment and other big-ticket items in August, a hopeful sign for the slumping economy.
Orders for capital goods, which are considered a good measure of business investment plans, rose 0.9 percent in August, the Commerce Department said Tuesday. It was the second gain in three months.
Overall factory orders fell 0.2 percent, after rising a downwardly revised 2.1 percent in July. A sharp decline in orders for autos and auto parts dragged down the overall total. But that follows July’s jump in automotive orders, which was the biggest increase in eight years. Automakers are returning to full production after output was interrupted by Japan’s March 11 earthquake.
Ford to pay workers bonus in new contract
DETROIT — Ford Motor Co. will pay its U.S. factory workers a $6,000 signing bonus and add thousands of U.S. factory jobs as part of a four-year contract deal reached Tuesday with the United Auto Workers union.
Ford plans to add 5,750 U.S. factory jobs under the deal, on top of 6,250 it announced earlier this year, for a total of 12,000 jobs by 2015. It also pledged to invest $4.8 billion in its U.S. factories.
Additional details were expected after a meeting with local union leaders in Detroit. The deal is subject to a vote by Ford’s workers. Voting is expected next week.
If they agree to the contract, Ford’s 41,000 hourly workers will get $1,000 more as a signing bonus than the $5,000 bonus GM workers got under an agreement ratified last month. The GM agreement also gives most workers profit-sharing payments instead of annual raises. Ford’s agreement is expected to follow that pattern.
Anheuser-Busch to invest $1 billion in U.S. facilities
ST. LOUIS — Anheuser-Busch plans to invest $1 billion in its U.S. breweries and other facilities by 2014.
The St. Louis-based brewer of Budweiser and Bud Light said the money allotted for projects this year will go toward modernizing its brewing processes, upgrading its systems to reduce greenhouse-gas emissions and installing equipment for new products.
Anheuser-Busch is the leading American brewer, but like most companies doing business in the U.S., has continued to see demand for its products fall as the tough economy wears on consumers. Its parent company, Belgium-based Anheuser-Busch InBev, the world’s largest brewer, reported that its second-quarter profit rose by more than a quarter as higher sales in China made up for soft demand in the U.S. and Brazil.
Meanwhile, Anheuser-Busch is reinvesting in the business to boost efficiency and productivity, and in turn, profitability.
Pot shop hit with $2.4 million tax bill
SAN FRANCISCO — The federal government has found a new weapon in its war on marijuana — the tax man.
The founder of a major San Francisco Bay area medical marijuana dispensary said Tuesday he has been hit with a $2.4 million tax bill following an Internal Revenue Service audit of Harborside Health Center’s income tax returns from 2007 and 2008.
The back taxes, penalties and interest resulted from an IRS determination that a tax code prohibiting cost deductions for businesses that traffic in illegal drugs applies to Oakland-based Harborside.
Harborside CEO Steve DeAngelo says the deductions the IRS disallowed includes standard operating costs such as rent, payroll, employee health insurance and licensing fees.
Government auditors did not dispute that Harborside had properly deducted its biggest expense — the millions it spent buying marijuana to sell.
From wire dispatches and staff reports