Precious Metals Slip Lower
Jan 15th, 2009 | By Doug Casey | Category: Financial NewsGold held in positive territory until just before New York opened on Wednesday, but then sold off by about $15, to $810, and it hung around that level for the rest of the Comex and Globex, finishing at $810.10/oz., down $10.20. Overnight, gold has been flat.
Platinum started its slide several hours before the New York open, and moved steadily lower until the late morning, where it leveled off to trade flat and end at $929/oz., down $8. Overnight, platinum has fallen off.
Silver peaked in late Hong Kong trading, fell sharply from the New York open to mid-morning, but rallied from there, advancing to a close at $10.55/oz., down 16 cents. Overnight, silver is trending lower. (Click here for charts)
Gold hit its lowest level in five weeks, but that the selloff in the precious metals wasn’t worse was probably some consolation to their fanciers, because the usual suspects were lined up solidly in opposition, with equities tanking, oil plummeting, and the dollar edging higher against the euro.
“The fact that the recession is deepening is making people very jittery,” said Matt Zeman, of LaSalle Futures Group in Chicago. “Money is flowing back to the dollar. Gold is looking pretty vulnerable. People haven’t been buying metals for safety.”
Zeman added that, “The Treasury market is where people have gone … It’s a flight-to-quality day, and people want to get out of everything.”
His words were corroborated by the sector-wide nature of the decline, as the Reuters/Jefferies CRB Index of 19 raw materials declined as much as 1.9%.
Is the dollar’s strength sustainable?
Kitco’s Jon Nadler thinks so, writing that, “The greenback’s rally has further to run, and it is not the bounce of a cat in rigor mortis … The question is: How much cash will some wish to raise to head for the hills with?”
That’s one good question. Another is: How much cash will they want to be caught with when inflation kicks in?
Source: Precious Metals Slip Lower
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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.