Gold pushed higher through the first hour of the New York session yesterday, peaking at $981, but then ran into some determined selling that sent it spiraling downward into the Globex, where it flatlined to finish at $959.30/oz., down $17.90. Overnight, gold has fallen further.

Platinum’s long slide was prolonged for another day, as the metal skidded from the last hour of NYMEX trading through the Globex to end at $1900/oz., down $60. Overnight, platinum has been flat.

Silver remained above $19 through the mid-morning hours, but faded from there, closing at $18.76/oz., down 13 cents. Overnight, silver is little changed.
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The precious metals took a trip south, as would have been expected as the usual suspects lined up uniformly against them, with oil continuing to slide, equities staging a powerful rebound, and the dollar rallying against the euro.

Dan Norcini, writing on jsmineset.com, commented that, “It was amusing reading the wire service commentary attempting to explain the drop in gold this morning.

“One provider stated that gold declined because Bernanke said that inflation is too high and is a top priority for the US government. Oh sure it is! And to show how serious it is, the Fed is going to immediately begin a rate hike cycle in which they will add 100 basis points before the end of the year is out. Of course, they will be sure to do just that while the feds bail out FNM and FRE and while the FDIC attempts to clean up the mess at Indy Mac (IMB). Don’t forget Washington Mutual (WM) whose share price is trading closer to $4.00 than the $44 it was trading at a year ago. Yes indeed, that is just what the financial stocks ordered – a hawkish Fed talkfest! Meanwhile they are forced to print Dollars like candy wrappers to hold things together! I am sure China and the rest of the sovereign wealth funds are thrilled.”

What seems sure is that gold was due for a bit of a correction. “Gold has had an impressive run, so it’s going to take a breather anyway,” said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago. It is currently in “overbought status” and “a pullback is expected,” Zeman said.

But the bulls’ optimism is undented. “While the need for cash prompts some investor liquidation in the short term, we expect the backdrop of geopolitical concerns and financial market jitters to limit price weakness, with the metal well-placed to challenge above $1,000 an ounce,” said James Moore, of TheBullionDesk.com.

Source: Precious Metals Slammed, Rebound in Equities Helps Cue Sell-off