Gold, Silver Sag
Jan 29th, 2009 | By Doug Casey | Category: Financial NewsGold had a choppy day, rising to near $900 late in the Hong Kong session on Wednesday, but that would prove to be the high for the day as it dropped sharply at the London open, then endured a series of rallies and selloffs in New York to finish at $886.40/oz., down $11.30. Overnight, gold has fallen further.
Platinum also fell as European trading began, but it fought its way back into the noon hour, after which it eased but still held positive territory at $949/oz., up $4. Overnight, platinum is little changed.
Silver had a very jagged day, flirting with the $12 all through, with lows in London and highs in New York that led to an eventual close at $11.95/oz., down 9 cents. Overnight, silver is trending lower. (Click here for charts)
For the most part, it was a continuation of the previous two days’ action for the precious metals yesterday, with few dramatic moves and a generally lower tone to the market, although platinum did finish slightly higher.
The usual suspects tried to help out, with equities rallying and oil moving higher, but they weren’t enough to offset the effects of a strengthening dollar.
Despite the slack day, Julian Phillips, of Goldforecaster.com, has lost none of his enthusiasm as he asks, “can we say the $:Gold link is breaking? It looks to be so! Gold was consolidating as the $ fell but rose previously as the $ rose. Gold is looking more like the place to be both in deflation [and uncertainty] and in inflation. Long-term investors have been buying well over 50 tonnes of gold in the last three weeks, confirming this. This amount of buying is certainly swamping central banks gold sales and is showing investors the way forward.”
In other news, Germany, the world’s second-largest holder of gold after the U.S., has denied rumors that it is selling gold from its vaults to make up for its growing deficit. The rumor had been circulating that the Bundesbank was selling gold, possibly to help fund a second fiscal stimulus worth about €50 billion.
The ruling Christian Democratic Union party had earlier advanced the proposition that the Bundesbank should sell some of its gold reserves, which amount to about 3,400 tons, to help reduce debt.
But Finance Minister Peer Steinbrueck rejected that proposal in Wednesday’s Berliner Zeitung newspaper, and Bundesbank spokeswoman Madleen Petschmann reiterated that the rumors were unfounded.
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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.