Gold Takes a Step Back
Jul 24th, 2009 | By Doug Casey | Category: Gold MarketGold didn’t do much through Hong Kong and London then showed some volatility in Comex trading, reaching an intraday high above $957 around 1 p.m. in New York and tumbling down from there through the Globex, finishing at its intraday low of $948.00/oz., down $3.10. Overnight, gold is little changed.
Platinum started moving up in the Far East then developed a downward trend at the Hong Kong close and fell to an intraday low around $1169 just before 10 a.m. in New York, but clawed back from there to an intraday high of $1185 around 1 p.m. Eastern before falling off again, closing at $1175/oz., up $2. Overnight, platinum is trending lower.
Silver traded flat most of the day, as a gentle rise and fall in London and the same in New York canceled each other out perfectly. The metal finished exactly where it started at $13.70/oz., up/down 0 cents. Overnight, silver is trending higher. (Click here for charts)
Despite big gains in oil yesterday, which is usually gold supportive, the yellow metal fell as it took its cue from rising equities and a slightly stronger dollar.
“We have a tug of war here between those who dare to buy at these levels and people who got in at previous levels. If it breaches $960 [an ounce] it might make a quick run to $975, or it might swing back to the lower end,” said Jon Nadler, senior analyst at Kitco Metals Inc.
If Treasury auctions or GDP data coming next week prove dollar supportive, “it would bring gold down to the $930s at a minimum,” Nadler continued.
While Peter Grant, a senior metals analyst at USAGOLD – Centennial Precious Metals, Inc., believes inflation to be a “legitimate risk,” Nadler calls the jury very much out. “Right now we’re still grappling with deflation if anything.”
In reality, we’ve already had massive inflation (meaning expansion of the monetary base), but it hasn’t manifested in prices yet because the banks are holding the funds in reserve rather than lending them out. Once that money hits the market, however, (and there’s no telling when that will be exactly) you can and should expect huge price inflation to follow. This will be extremely positive for gold.
Source: Gold Takes a Step Back
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