Gold, Silver Suffer Another Smackdown
Apr 25th, 2008 | By Doug Casey | Category: Gold MarketGold held around $905 until the opening of the New York session Thursday, then it became another smackdown day, with the price heading lower until early afternoon, after which it leveled off to finish at $886.60, down $18.20. Overnight, gold has edged lower.
Platinum wasn’t treated any more gently, shoved below $1960 before rallying modestly and ending at $1963/oz., down $38. Overnight, platinum is sharply lower.
Silver got whacked to as low as $16.50 just after the noon hour, but managed to fight its way back to a close at $16.74, down 27 cents. Overnight, silver is trending lower.
(Click here for charts)
It wasn’t a bloodbath, but the cumulative effects of the past few days of downward-trending trading are fraying the nerves of those long the precious metals.
Yesterday’s losses were undoubtedly exacerbated by a sharply strengthening dollar and easing oil prices. And with equities also enjoying a solid day, attracting money away from other sectors, a triple whammy was laid on gold and silver.
While acknowledging the influence of the dollar and oil, Kitco’s Jon Nadler adds that, in his opinion, “Gold investors are also beginning to see several pivot points taking shape in currencies, the credit crisis, and the official sector’s thus far only verbal commitment to stability, and they are lightening up on metals positions as a result.”
But the London-based precious metals consultancy GFMS offered its own bullish view, particularly with regard to platinum, which the company sees as soaring as high as $2400/oz.
GFMS said it expects considerable volatility in the prices of both platinum and palladium in 2008, and forecast a platinum trading range between $1,700 and $2,400.
“We would expect the higher end of these ranges to coincide either with further difficulties in South Africa or gold prices breaking strongly through the $1,000 level,” GFMS said in its Platinum and Palladium Survey yesterday.
“We remain positive for gold also and see this as a real possibility in 2008,” GFMS added, noting that that world platinum production fell 6% last year mainly due to production problems in South Africa. Production in the U.S. and Canada also fell last year, by 13% and 10% respectively.
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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.