Precious Metals take it on the Chin Again - Interest Rate Uncertainty Driving Market
Jun 13th, 2008 | By Doug Casey | Category: Gold MarketGold declined from the far East into the first hour of the New York session on Thursday, bottoming at $857 before rallying after the noon hour to finish at $868.40/oz., down $11.70. Overnight, gold has fallen off further.
Platinum dropped below $1990 in Hong Kong, then rode a roller coaster through the day, to end at $2013/oz., down $24. Overnight, platinum is slightly higher.
Silver declined gently until the New York open, after which it fell off a cliff, dropping 40 cents in less than an hour, but it too pushed higher after noon to close at $16.44/oz., down 41 cents. Overnight, silver is sharply lower.
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The precious metals’ rally lasted all of a day, as they reverted to a downtrend yesterday with a pickup in the dollar.
Gold was also pressured early in the session by oil prices that were off sharply and a stock market that rallied strongly. Even though both reversed trend later in the day, gold was unable to recover.
“The market’s roller-coaster pattern continued amid the high-noon standoff developing between the Fed and the U.S. dollar’s morticians,” said Kitco’s Jon Nadler.
The tension between the dangers of letting inflation run vs. raising rates in order to head it off does seem to be ramping up. Observers are watching the dollar’s relationship to the euro as an indication of market sentiment.
At the moment, “The perception … is that there will be higher interest rates,” said Frank McGhee, of Integrated Brokerage Services in Chicago. “Another break in the euro, and you’ll just see the world step on gold.”
Source: Precious Metals take it on the Chin Again - Interest Rate Uncertainty Driving Market
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.