Fannie-Freddie Bailout Dominates
Sep 9th, 2008 | By Doug Casey | Category: Financial News, Gold MarketGold was sharply higher in Hong Kong, dipped into the mid-point of London trading, soared into the first hour of the NYMEX, but then gave it all back, winding up with a very lackluster finish at $801.20, down $1.70 from Friday. Overnight, gold has edged higher.
Platinum declined from Hong Kong all the way through the Globex, with only a few short, small blips up along the way, and ended at its intraday low of $1323/oz., down $31. Overnight, platinum has fallen further.
Silver took a licking after holding well into positive territory above $12.50, from the far East until mid-morning in New York, after which the lights went out and it sagged as low as $11.90 before a bit of late buying pushed it back to $12.06/oz., down 16 cents. Overnight, silver is trending higher.
The bad news is that gold couldn’t hold onto its early gains. The good news is that its performance wasn’t all that bad. Considering the dollar’s bump up and crude’s fractional gain on the day, it coulda been much worse.
The other bad news is that platinum was sharply lower, again, and that silver did worse than gold, as both are hampered by their status as primarily industrial, rather than investment metals. And the big bailout of Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE) (F/F) announced yesterday, despite the optimism equity traders expressed, isn’t particularly positive for the economy going forward.
What happens next depends in large part upon how long dollar bulls remain enamored of the F/F bailout.
“The yellow metal continues to show great resiliency in the face of weak oil and a dollar buoyed by the announcement of” the F/F news, wrote Peter Grant, a metals analyst at USAGOLD-Centennial Precious Metals.
But there is panic out there. Said Ron Goodis, of Equidex Brokerage Group in Closter, New Jersey, “If [gold] were to be the haven asset, then it should be much higher. The dollar is the safer currency. With people concerned what their homes are worth, what their stocks are worth, they’re moving into cash.”
The dollar a safer currency than gold? In what universe? we have to wonder.
Source: Fannie-Freddie Bailout Dominates
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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.