Gold Endures Frightful Selloff
Oct 13th, 2008 | By Doug Casey | Category: Financial News, Gold MarketGold was strong from the far East through the first half of London on Friday, but it started down with the COMEX open, then really fell off a cliff at the noon hour, falling $60 in the next two hours, before rallying back a bit during the Globex to finish at $849.90, down $62.50. Despite the wretched day, gold was up nearly 2% on the week.
Platinum followed gold lower in the late day trading, skidding back below the $1000 mark to end at $987/oz., down $49. For the week, platinum actually gained 2.6%.
Silver fared even worse than gold, plummeting from $12.20 in Hong Kong to $9.50 in early Globex trading, before clawing back over the $10 mark to close at $10.17/oz., down a ghastly $1.90. For the week, silver was off just under 9%. (Click here for charts)
Not much to say about Friday’s debacle in the precious metals, other than that’s what it was. Gold should have been helped by equities markets that continued to tank, but was undoubtedly laid low by slumping crude prices and the perplexing stampede into the US dollar, which apparently still has safe haven status.
Despite yesterday’s setback, it’s well to remember that gold posted a solid gain for the week, although silver—with its stronger connection to the industrial market—continues to look very, very weak.
The Hightower Report wrote of the day’s action in the gold market: “Perhaps some longs we’re simply inclined to bank profits ahead of the weekend or perhaps seeing the US Dollar give off the impression of finishing the week strong discouraged some players. As suggested in the midday coverage just saying discussions of a stock trading holiday in some foreign markets would seem to leave high anxiety in place into next week. Certainly the G7 will attempt to shore up confidence with weekend actions and that could be another reason why some gold longs decided to bank profits around the highs of today.”
Panic elsewhere is also playing in as Friday’s selling clearly indicates “some fund liquidation desperate to raise cash,” said Peter Spina, president of GoldSeek.com. “The true gold market price is nothing close to the current paper gold price.” Spina added that, “The disconnect between paper gold price and the physical gold price will not last.”
If it does, there is surely something rotten in the state of Denmark (and everywhere else).
Source: Gold Endures Frightful Selloff
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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.