Gold was down in the far East, but bounced off $775 as it rallied a bit in early London trading, though it never regained Thursday’s close, then was taken back to the woodhouse after the first hour of the NYMEX and smacked down to finish at $786.30, down $19.40. For the week, gold slumped 8%.

Platinum, which seems incapable of holding any kind of level, did manage to recover from its Hong Kong low of $1325, but still took a licking on the day, ending at $1357/oz., down $117. For the week, platinum plunged 12%.

Silver took a very hard right to the chin, with the smallest rally snuffed and the only positive being its ability to stay above its Hong Kong low by 20 cents as it staggered to a close at $12.70/oz., down $1.44. For the week, silver gave up a ghastly 16.8%.
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Well, there wasn’t any way to lipstick up this particular pig, as the precious metals submitted a week of relentless decline. Gold experienced its biggest weekly slide in 25 years, silver is plumbing levels not seen in the past 12 months, and platinum is now down 40% from its March high.

It’s enough to give the hardiest of bulls the night sweats and, were the fundamentals not unchanged, we’d be banging our heads against the wall ourselves.

Mr. Market is notoriously dismissive of those who attempt to call bottoms, so we’re not going to go there. All we can do is make apologetic noises to our spouses and try to explain why we’re still buying.

Peter Spina, of Goldforecaster.com, who is nearly always clearheaded about these things, wrote: “The short-covering rally in the dollar is a prime driver for the pullback in gold prices and that was aided by free market intervention by Central Banks. All this has done is provided additional time before the serious nature of the financial crises has to be once again confronted … The ingredients are in place for a significantly higher gold price and this short-term anomaly only means that gold can still be accumulated sub $1,000 an ounce. The rapid rate at which dollars are being created (according to shadow stats the no longer published M3 is expanding at double digit rates) remains the primary driving force in the gold market, this cheap monetary policy will continue to debase the value, integrity and confidence in the faith-backed Dollar. Competitive paper money devaluations will enhance gold’s luster going forward as hundreds of billions of fictitiously created paper currency is used to continue these monstrous bailouts with government deficits rapidly growing.”

And Jim Sinclair, writing on jsmineset.com, added: “Certain hedge funds went broke on other items. They were holding gold and the last of that was thrown into the market to sell after cash gold broke $800. Margined gold holders went in mass into negative cash positions which resulted in them being sold out last US evening … As gold hit its lows … over $40 off I am told the Chinese entered the cash market to take the layoff in cash gold off the bankrupt hedge funds and negative value sellouts in the paper market. You have seen massive involuntary liquidation last US evening.”

Source: The Beat Goes On