Gold Sells Off A Bit
Dec 4th, 2008 | By Doug Casey | Category: Financial NewsGold had a lackluster day on Wednesday, holding at Tuesday’s level until the open of London trading, falling from there to mid-morning, rallying back by the noon hour, but then easing in the afternoon and finally finishing at $772.70, down $8.80. Overnight, gold has edged lower.
Platinum soared in Hong Kong, pushing past $840, but then gave back all of its gains by mid-morning and traded sideways from there, ending at $806, down a buck. Overnight, platinum has been flat.
Silver fared a bit better than its sister metals, hitting its low point at the Comex open, then rising in a mostly steady manner through the day, closing at $9.65, up 10 cents. Overnight, silver is little changed. (Click here for charts)
Rising equities markets may have given some lift to gold, but it wasn’t nearly enough to overcome the downward pull exerted by a slightly higher dollar and oil prices that moved slightly lower.
“After having a run to the $830 level a few weeks ago, gold has been under pressure on account of the dollar,” wrote Edward Meir, of MF Global. “More importantly, with deflation — as opposed to inflation — now being the key macro development to watch, gold’s attraction has been waning.”
And, “There remained a general lack of buying interest [for gold] ahead of key rate decisions from the BoE and the ECB,” said analysts at Action Economics, although it’s doubtful that the banks’ widely-expected big rate cuts will have much effect on the precious metals that hasn’t already been priced in.
“In general, the outlook for commodities is poor due to expectations of a long and protracted global recession,” Action Economics said. “However, gold may be protected from some of the fallout due to safe haven demand on dips.”
A lack of any real activity in gold may be the norm for the balance of the month.
“Gold is at a basic standstill waiting for some real news,” wrote Miguel Perez-Santalla, of Heraeus Precious Metals Management in New York. “It is all about investors at this stage, as the jewelry industry will not be in the picture again until after the New Year.”
If gold does tread water in December, it will log its first down year in the past eight. (It was at $834 on Jan. 2, so that’s not a done deal yet.) But that wouldn’t be a big surprise, as the US dollar index is poised for its first gain in three years.
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