Gold Plummets on Stronger Dollar - Traders Turn Exceedingly Wary
Jun 24th, 2008 | By Doug Casey | Category: Gold MarketGold was steady from the far East through the first half of London trading, holding at or near $905, but collapsed when the New York session opened, cratering more than $25 in the first hour before edging higher through the rest of the day and finishing at $883.70/oz., down $17.60 from Friday. Overnight, gold has been trending higher.
Platinum’s decline was neither so steep nor so deep, as it ended at $2035/oz., down $16. Overnight, platinum has been flat.
Silver declined a bit more heading into the New York open, but its fall was equally fast and furious before it, too, rallied a bit into a close at $16.78/oz., down 54 cents. Overnight, silver has been pushing higher.
(Click here for charts)
It was a ghastly day for the precious metals, especially considering that the market-moving forces were not all that strong, with the euro slipping less than a penny against the dollar.
Crude also factored in, with the price on the rise despite word out of the oil summit that the Saudis stand ready to increase production.
Traders are very wary at the moment, according to Julian Phillips of Goldforecaster.com, who summarized the situation thusly:
“The gold price was reacting only to the U.S. $ moves and on the smallest of moves. It ignored what was positive for gold, the Saudi Arabia meeting on oil, which did nothing to lower the oil price. However, it is very nervous on the smallest $ story now. Even the speculators lowered their exposure to precious metal moves last week, so there is an air of expectancy in the market now.”
All the elements are in place for gold’s next leg up, but until traders are fully convinced it’s happening, they are going to be careful, and are likely to wait until the evidence is overwhelming that it’s underway before jumping in with both feet.
Source: Gold Plummets on Stronger Dollar - Traders Turn Exceedingly Wary
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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.