Precious Metals Begin Week On Down Note
Feb 10th, 2009 | By Doug Casey | Category: Financial NewsGold hit its high in late Hong Kong trading on Monday, then declined slowly but steadily to the late Comex, where it bottomed at $890 before rallying a bit through the Globex to finish at $895.00/oz., down $16.40. Overnight, gold has been flat.
Platinum plunged from Europe through the first hour in New York, bottoming below $975, clawed its way back to $995 at noon, but then eased a bit the rest of the day to end at $989/oz., down $12. Overnight, platinum is sharply higher.
Silver held gamely above the $13 mark until noon on a down day, but then succumbed to afternoon selling that drove it down to close at its intraday low of $12.83/oz., down 13 cents. Overnight, silver is trending higher. (Click here for charts)
It was an inauspicious start to the new week for all of the precious metals, especially disappointing as the dollar was sliding against the euro. But oil was also falling and equities finished mixed as traders await Treasury Secretary Geithner’s announcement of yet another bank bailout, re-scheduled from yesterday to today.
Gold fell the most in four weeks.
“Gold maintained a supportive tone, but did succumb to profit taking,” said analysts at Action Economics. “Momentum was limited as the market awaited the outcome of the U.S. stimulus package.”
Today could also be the day the Obama stimulus bill gets voted on in the Senate. With both that and the bank plan on everyone’s mind, many traders were simply keeping their powder dry.
Gold was also hurt by fears that when Congress finally does get around to passing a stimulus package to revive the economy, it will come in smaller than expected. That could ease the risk of accelerating inflation, tarnishing gold’s allure as a safe haven amid rising prices elsewhere.
Tom Pawlicki, an analyst at MF Global (NYSE:MF) in Chicago, took note of this when he wrote that, “Every day that the size of the stimulus grew last week, the gold market seemed to trade higher. That could unwind this week.”
Still, the fact of the matter remains that the Fed, Treasury, and FDIC have lent or spent almost $3 trillion in the past two years and are on the hook to provide as much as $5.7 trillion more.
Nothing could be more gold bullish.
Source: Precious Metals Begin Week On Down Note
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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.