Precious Metals Slide Along with Equities
Nov 12th, 2008 | By Doug Casey | Category: Financial NewsGold sat at its high for the day in Hong Kong on Tuesday, but started declining as London opened, and fell gently through the day, bottoming in the late morning before reclaiming a little lost ground late to finish at $731.40, down $13.70. Overnight, gold has been flat.
Platinum fell off into the New York open, then traded tightly rangebound between $810 and $820 straight through the day, ending at $814/oz., down $39. Overnight, platinum has edged higher.
Silver declined slowly from the far East to the Comex open, steadied there for a bit, then fell off a cliff around mid-morning, dipping as low as $9.55 before rising back up and going flat on the Globex, closing at $9.75/oz., down 39 cents. Overnight, silver is little changed. (Click here for charts)
It was a rough day for the precious metals, which fared poorly as equities markets were plunging, crude was sinking, and the dollar was taking a leather sap to the euro.
With more than $28 trillion in value having been erased from global equity markets this year, gold is in a sense being held captive for a while.
Even long-term bull Zachary Oxman, of Wisdom Financial, has been forced to concede that, “Gold and commodities as a whole are continuing their almost-perfect correlation to the stock market … The trade now, if you believe the market is due to fall further, is surprisingly short gold.”
But that doesn’t mean he’s throwing in the towel. Few gold bugs are.
“While gold has not performed as well as expected over the past month, it continues to be sought after as a good diversifier,” said David Beahm, a vice president at precious metals retailer Blanchard & Co.
Beahm added that the price of gold is following the dollar and “while the dollar remains strong, it is only a matter of time until it begins to fall again.”
Sentiment regard platinum, however, is just plain glum. “Nobody’s going to buy cars,” says Leonard Kaplan, president of Prospector Asset Management in Evanston, Illinois Kaplan said. “You’ll see platinum trade $100 to $250 lower than gold. It happens in every recession. Platinum is industrial, and catalytic converters and jewelry are going to get slammed.”
Source: Precious metals slide along with equities - Platinum outlook particularly bleak
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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.