Gold Sinks on Equities Rally
Oct 14th, 2008 | By Doug Casey | Category: Financial NewsGold was strong in the overseas markets, but it started down with the New York open, declined sharply in the half-hour to the mid-morning point, rallied back to the close of the COMEX and eased slightly in the Globex to finish at $832.20, down $17.70 from Friday. Overnight, gold is trending higher.
Platinum had a lot of ups and downs to no ultimate effect, as it ended at $987/oz., unchanged. Overnight, platinum is sharply higher.
Silver fared better than gold for a change, opening up in Hong Kong and holding its early gains through a 25-cent rangebound day, to close at $10.67/oz., up 50 cents. Overnight, silver has pushed higher. (Click here for charts)
It was an oddly mixed day for the precious metals, with silver up, gold down, and platinum flat. Gold fanciers had to be a bit disappointed, as the usual suspects moved in its favor, with oil rising and the dollar slipping vs. the euro.
However, gold was competing with the buck for investors’ interest, as those who have been sitting on cash went stampeding back into equities.
“The price movement of gold demonstrates how quickly demand for a safe haven could fade,” said Peter Fertig, analyst at Dresdner Kleinwort. And vice versa, we might add.
The steps being taken to avert a world financial crisis seem to have reassured stock markets. But in the long run, are they gold positive or negative? In its Monday Gold Report, USAGold.com writes:
“According to this morning’s [G7] press release, ‘swap lines between the Federal Reserve and the BoE, the ECB, and the SNB will be increased to accommodate whatever quantity of U.S. dollar funding is demanded. The Bank of Japan will be considering the introduction of similar measures.’
“These latest measures come on the heels of last week’s announcement by the ECB that they would provide unlimited euro funds to financial institutions …” And, “The UK has already announced a £500 billion bailout of their banking sector …
“Unlimited dollars. Unlimited euros. All but unlimited sterling. We are talking about a global re-inflation on a massive scale … We’ve recently seen gold set new all-time highs against euro and sterling. Gold nearly set a new record high against the Swiss franc. Given ongoing strong demand for physical gold and incredibly tight supplies, one has to wonder how long the dollar gold charade can be maintained.”
A very good question indeed.
Source: Gold Sinks on Equities Rally
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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.