Precious Metals Taken Behind The Woodshed
Dec 2nd, 2008 | By Doug Casey | Category: Financial NewsGold peaked just north of $810 in late Hong Kong trading, then fell steadily save for a couple of small bumps up, from there all the way through the Globex, before it finally settled at $768.20, down a whopping $48.10 from Friday. Overnight, gold has edged higher.
Platinum likewise peaked in Hong Kong, just over $850, and likewise eased from there through the Globex to end at $790, down $78. Overnight, platinum is trending higher.
Silver also declined from Hong Kong on, but really went waterfall when New York opened, shedding 70 cents in the first hour, and it never did recover as it ground to a close at $9.23, down $1.03. Overnight, silver has moved higher. (Click here for charts)
There’s no putting lipstick on this particular pig. It was simply a wicked bad day for the precious metals yesterday, a turnaround that was especially disappointing after the solid gains of last week.
But nothing lined up in their favor, with the dollar showing renewed strength, oil capsizing, and U.S. equities markets taking one of their worst shellackings ever, following heavy losses in the overseas markets.
“Marginal gold investors just aren’t in the market now,” said Frank Lesh, a trader at FuturePath Trading in Chicago. “Equities have been a driver for the metals because they’re a proxy for the economy. There’s not a lot of excess risk capital around to invest in gold.”
The selloff was across the board, as the Reuters/Jefferies CRB Index of 19 raw materials was down 3.2%, and has now dropped 35 percent this year, leading Lesh to add that, “There’s not a lot of interest in commodities, and it’s doubtful we’ll see any interest until the funds return next year.”
But James Turk, the founder of GoldMoney.com, remains optimistic, seeing a rise above $900 in the near term. “People want physical gold,” Turk says. “They don’t want paper gold. It’s basically a question of inflation, which I expect to surge next year. People will want gold to avoid counterparty risks because of the uncertainty of the banking system.”
Source: Precious Metals Taken Behind The Woodshed
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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.