Gold Still Generating Little Buying Interest
Dec 8th, 2008 | By Doug Casey | Category: Financial NewsGold was slightly higher from the far East to the New York open on Friday, declined to its low for the day, $740, just before noon, then about-faced and pushed higher for the remainder of the day, finishing at $754.30, down $10.80. For the week, gold coughed up 7.4%.
Platinum was also in the green until New York opened, dropped off on the Comex, but pushed back into positive territory on the Globex, ending at $805, up $12. For the week, platinum was down 7.3%.
Silver started down before gold, at the mid-point of London trading, bottomed for the day at $9.15 in the first hour in New York, rallied, fell back, then rallied again from the noon hour on, closing at $9.46, down a penny. For the week, silver shed 7.8%. (Click here for charts)
It was a mixed day for the precious metals on yet more lackluster trading, with gold continuing to decline, but silver holding steady.
In the end, gold got no lift from rising equities, while being unable to shake off the effects of sinking oil prices and a strengthening dollar.
The Hightower Report summarized the day thusly: “The gold market was clearly disappointed by the latest cycle of bad news on the US economy. As in a number of other commodity markets the overhanging fear of deflation seemed to dominate the trade and it probably goes without saying that strength in the Dollar is serving to turn up the liquidation pressure in most physical commodity markets. It also seemed as if the weakness in the US equity markets and concern that US auto makers might be left to fail served to weaken gold prices. With talk of liquidation of holdings in various Gold derivative instruments, it was clear that sentiment was deteriorating toward all kinds of gold instruments.”
But Dan Norcini, writing on jsmineset.com, reminds us that the daily action involves paper gold on the Comex, not the real deal, and in that market trading has slowed to a crawl as “more and more longs throw in the towel and close things out for the year.”
Norcini continues by writing that, “There are some fresh short sellers but these are minor compared to the selling originating from speculative longs bailing out in the face of disappointing price action … [and] you could not get a more classic definition of a washout which is exhausting itself as both shrinking volume and collapsing open interest signal that this is NOT the beginning of a bear trend but rather a technical washout that is winding down.”
Once it’s completely wound down, the bulls should seize the day.
Source: Gold Still Generating Little Buying Interest
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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.