Gold, Silver Still In The Quagmire
Nov 13th, 2008 | By Doug Casey | Category: Financial NewsGold had another day of little volatility, just a soggy downtrend on Wednesday, drifting from its high at the outset of London trading to its intraday low early in the Globex, and a finish barely off that at $709.50, down $21.90. Overnight, gold is trending higher.
Platinum pushed above $840 in Hong Kong, but then traded tightly listlessly with a down bias through the day, ending at $811/oz., down $3. Overnight, platinum has been flat.
Silver followed very much the same path as gold, only moreso, sliding steadily to close at its intraday low of $9.25/oz., down 50 cents. Overnight, silver has pushed higher. (Click here for charts)
It was a very rough day for gold and silver, which seemed to line up with plunging equities markets again, rather than asserting safe haven status amid the carnage. Crude didn’t help by selling off, and a dollar flat against the euro provided no support.
The Hightower Report captured the glum mood among gold fanciers, writing that: “The gold bulls have to be very disappointed in the markets ongoing track with physical commodity markets. However, despite some two sided action in the US Dollar the Greenback action was generally a detriment to the gold market during the trade Wednesday. It also appeared as if weakness in the equity market was negative to gold prices and it probably goes without saying that more new lows for the move in the energy markets added to the pressure in gold prices. With demand destruction being feared in a number of markets and the fear of severe slowing present in almost every headline it wasn’t surprising to see gold behave like a mere physical commodity facing a recession.”
That gold continues to fall in an environment where it should be strong has more than a few scratching their heads while bowing to the dictates of the market.
“The big deflation is on,” says Ron Goodis, of Equidex Brokerage Group in Closter, New Jersey. “It’s risk aversion. The trend is still in place: Long the dollar and short all commodities.”
“The overall mood remains fragile,” said Edward Meir, of MF Global (NYSE:MF), and he cited short covering as the only factor on the horizon to make the case for sustained move higher.
However, Meir added, “At this stage, the best we can hope for is for the various metals to enter a prolonged, sideways drift, an indication that participants are finally concluding that the worst of the declines are behind us.”
Source: Gold, Silver Still In The Quagmire
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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.