Precious Metals In Long Slide
Apr 17th, 2009 | By Doug Casey | Category: Financial NewsGold was in positive territory until New York opened on Thursday, then sellers took out their big bats and began whacking away, driving it down about $15 by mid-morning, after which it leveled off through the Comex, only to get slammed again on the Globex before finally limping to a finish at $874.30/oz., down $16.30. Overnight, gold has fallen off.
Platinum followed a roughly similar path, though it was not hit as hard in the afternoon, and ended at $1203/oz., down $14. Overnight, platinum has edged higher.
Silver was more of the same, although it got hit much harder and more consistently straight through, with not even a teensy late Globex rally able to put much of a charge into the day, as it was beaten down to a close at $12.22/oz., down 54 cents. Overnight, silver is sharply lower. (Click here for charts)
Anyone who had become accustomed to the series of blah days we’ve experienced for gold and silver lately was treated to a rude awakening yesterday, as both took a sound thrashing. Platinum held up a shade better, although it too found the red.
Among the usual suspects, equities and oil were both higher, but gold seemed more inclined to take its cue from the rising dollar.
Also factoring in were jobs data that suggested to some that the U.S. economy is stabilizing, and concerns that deflation is in the cards, reducing gold’s attractiveness as an inflation hedge.
“There is a knee-jerk reaction to the earnings news and jobs data that are stripping gold of the safe-haven bid,” said Brian Kelly, of Kanundrum Research.
Or perhaps, as Dan Norcini wrote on jsmineset.com, it’s simply that “Gold just seems to be acting ‘tired’ right now. Keep in mind that modern markets have now morphed into being all about momentum. Funds do not make money if prices do not move particularly to the upside. Once momentum stalls out, funds go and look for opportunities elsewhere. That is what we are seeing in gold for now.”
A breather, or a continuing correction? Bears abound at the moment. “With gold prices continuing to be capped under $915 an ounce, I would look for the market to roll over and play bear,” wrote Ralph Preston, of Heritage West Futures in San Diego. “A close under $853 an ounce projects another move down towards $800 an ounce.”
Source: Precious Metals In Long Slide
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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.