Gold Corrects, Following Oil
May 23rd, 2008 | By Doug Casey | Category: Gold MarketGold peaked at $935 in Hong Kong, and declined from there pretty steadily, right through the NYMEX session on Thursday, before edging a bit higher in the Globex and finishing at $920.40/oz., down $11.40. Overnight, gold has edged higher.
Platinum pushed as high as $2230 in Hong Kong, but sank through to New York, then traded sideways to end at $2164/oz., down $37. Overnight, platinum has been flat.
While silver was lower to the mid-point of the London session, it rallied from there, making its way nearly back to the break-even point, and closing at $17.96/oz., down just 2 cents. Overnight, silver has been trending higher.
(Click here for charts)
As might have been expected, there was profit-taking in the precious metals yesterday after their recent runup.
But the damage wasn’t large, especially considering that the usual market movers, oil and the dollar, both went against them, with the former backing off and the latter staging a modest rally.
In fact, some analysts were making the case that both the dollar’s rise and gold’s fall were technical in nature.
Technician Zachary Oxman, of Wisdom Financial, believes that, “Until we cross and close above the $940 level, we’ll remain range-bound between $900 and $940.”
Nick Ruggiero, a trader at Eagle Futures Inc. in New York, noted gold’s recent link to oil and said, “You’ve got to be cautious because when you do get a big sell-off in oil, all commodities are going to get hit hard.”
And how much does the paper gold market influence the metal’s price? Plenty, contends Jim Sinclair of jsmineset.com.
“It would be bullish to shut down the US market for gold,” Sinclair writes, “because then you would have a thin market with a positive Euro bent on gold and a more positive global market would be created.
“No access for major traders will be denied, that you can be sure of. I would love to see US trading stopped in paper gold. That would be good for $150 on the upside after less than 24 hours. The poor COT would not be able to create the influence on the global market they do with the aid of the US paper market cabal.”
Source: Gold Corrects, Following Oil
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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.