Blood in the Streets, Precious Metals Clobbered
Sep 10th, 2008 | By Doug Casey | Category: Financial News, Gold MarketGold was unchanged until the mid-point of London trading, then sank to the second hour of the NYMEX, rose back up into the NYMEX close, but was off steeply on the Globex, finishing an overall dreadful day at its intraday low of $776.00, down $25.20. Overnight, gold is slightly lower.
Platinum held the $1300 level until the New York open, then declined pretty much straight through the day and ended at its intraday low of $1211/oz., down $112. Overnight, platinum has edged lower.
Silver followed much the same path as gold, although its mini-rallies were shorter and shallower, and when all was said and done it was mired at its intraday low of $11.25/oz., down 81 cents. Overnight, silver has been flat.
Well, there is definitely blood in the streets now, as even plunging equities markets couldn’t scare any money into the world’s number one safe haven. Yes, the dollar was slightly higher, and crude plummeted once again, but that doesn’t begin to explain what the selloff is about.
The real oddity is that at the same time the futures markets have been taking down gold, and especially silver, demand for the physical metals at the retail level has blown through the roof.
Shops are unable to keep one-ounce coins on their shelves and no one is selling back to them, both the U.S. and Canadian mints have either suspended or severely rationed output, India is reporting massive shortages as it heads into prime buying season, and long delivery delays for buyers of coins and small bars are universal.
This is a major disconnect. So what’s going on?
For the most part the mainstream pundits are ignoring this story. Typical is Kitco’s Jon Nadler, who commented merely that, “Gold continued to trade lower as oil prices fell further following news that OPEC sees its market essentially in balance and will not curtail current output levels.”
“We are intrigued by the collapse of gold and other measures of inflation expectations from the highs seen in March,” said Michael Darda, chief economist at MKM Partners in Greenwich, Connecticut. “The quest for liquidity and capital seems to have had the tertiary effect of rendering the Fed’s 2 percent interest rate target far less inflationary than what had been priced into the market between August and March.” Say what?
Source: Blood in the streets - Precious metals clobbered. No end in sight?
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Doug Casey is a contrarian investor, sought-after public speaker and author of several books. His work "Crisis Investing" held the position of # 1 bestseller on the New York Times list for 26 consecutive weeks. Doug's unusual views on the economy - and just about everything else - have gained a huge following in the investment community, and it certainly helps that his stock recommendations of undervalued junior exploration companies have made his subscribers millions. Now in its 27th year, Doug's monthly newsletter, the International Speculator, is one of the most established and esteemed publications on gold, silver and other natural resource investments. Together with the Casey Energy Speculator, it covers a broad range of carefully selected stocks with the very real potential of double- and triple-digit returns within 12 to 24 months.