Gold Backs Off In Thin Trading
Dec 31st, 2008 | By Doug Casey | Category: Financial NewsGold fell in the far East on Tuesday and never really recovered, in thin trading, bottoming at $867 at the New York open, then regaining a bit of lost ground through the Comex and Globex, and finishing at $873.60/oz., down $7.00. Overnight, gold has fallen off.
Platinum was also off into the New York open, falling to near $890, but pushed higher through the day and ended dead flat at $911/oz. Overnight, platinum has drifted lower.
Silver had a real rollercoaster day, falling as low as $10.65 as the Comex opened, rising sharply to peak at $11.10 at the noon hour, then declining again until a small bump at the end of the Globex took it to a close at $10.92/oz., up 6 cents. Overnight, silver has edged lower. (Click here for charts)
With trading thinning still further ahead of the New Year’s holiday, the prospect of volatility was ever present, but it never materialized as the precious metals showed little to no change yesterday.
The usual suspects offered little in the way of direction, as equities posted gains, oil fell back, and the dollar retreated.
Chart watchers noted that gold’s seven-day relative-strength index for futures topped 70 yesterday, a signal generally taken to mean that prices may be headed lower in the near term.
“Gold is bouncing up against some resistance and needs to digest some of these gains,” said Stephen Platt, of Archer Financial Services in Chicago.
Another technician, Dennis Gartman, editor of the Gartman Letter, wrote that, “Gold’s technical problem is that since March, each high has been progressively lower, as has each new low.”
Nevertheless, gold is poised for its eighth straight yearly gain, up about 5% on the year. What else is in positive territory for 2008?
Even Gartman admits that, “If the Fed is going to expand the monetary aggregates as they have in order to sponsor economic growth, then inflationary pressures will become more evident after the turn of the year, and so too should our exposure to gold.”
And investors continue to pile into the SPDR Gold Trust (NYSE:GLD), the biggest exchange-traded fund backed by bullion. As of Monday, the fund’s vaults had swollen 24% this year, to a record 780.2 metric tons.
Source: Gold Backs Off In Thin Trading
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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.