Posted on 01/21/2011 9:29:26 AM PST by SeekAndFind
Gold touched a two-month low in Europe on Friday, pressured by a firmer appetite for assets seen as higher risk on expectations the economic recovery was gaining traction, but a retreat in the dollar prevented a steeper drop.
The metal is heading for a third consecutive weekly loss and its weakest monthly performance since July as a more optimistic view of global economic growth and stability boosted investment in assets seen as higher risk, like stocks, at gold's expense.
Spot gold fell as low as $1,340.80 an ounce and was bid at $1,343.80 an ounce at 1217 GMT, against $1,345.40 late in New York on Thursday. U.S. gold futures for February delivery fell $3.20 an ounce to $1,343.30.
Analysts say outflows from products like physically backed exchange-traded funds suggest investor appetite for gold is slackening after a run of firmer than expected U.S. economic data and as concern over euro zone sovereign debt levels recede.
"We are still staying on track and above the longer-term upward trend, but definitely at the moment the reasons to buy gold -- the fear of a deepening of the European crisis, a weaker dollar, fear over the economic crisis worldwide, inflation -- are not there," said Commerzbank analyst Eugen Weinberg.
"Gold indeed used to be a fear indicator and as this fear appears to be leaving the market, the gold price is under pressure," he added.
However, gold still looks set to climb in 2011, he said, with persistently low interest rates likely to lend support. The precious metal tends to underperform in the early months of even positive years, Weinberg added.
(Excerpt) Read more at reuters.com ...
fear drives an economy..
what a way to run a country.
Silver dropped like a buck-fifty yd as well. I’m thinking it’s at least in part a reaction to the House vote to repeal Obamacare — baby steps to reining in the fiscal insanity.
I think it could pull back a bit more — maybe down to $1300 — before it bounces back and surpasses $1500 later this year. The economy will NOT improve so long as the FED keeps printing worthless US dollars with nothing to back them. Instability, the devaluing of the dollar, and the need for something of REAL value, will make it a wise idea to invest in at least SOME Gold (or other precious metals or resources/commodities) just to be prepared. And those investments might include a bit of food for storage and some “emergency” supplies... It never hurts to be ready for anything... Just sayin.’
More like the major markets realize that you can’t eat gold and silver so they are buying food. After the food stocks go up the major markets will realize that when there is chaos food means nothing unless you can guard it so they will pad their portfolios with lead and defense stocks. I just checked the stock of a local barbed wire manufacturer and their stock price is climbing through the roof. After doing some research on the barbed wire manufacturer I realized it wasn’t a good buy because their profit margins were razor thin.
Related
Suddenly, Gold Becomes a Pariah
http://www.zerohedge.com/article/suddenly-gold-becomes-pariah
Stunner: Gold Standard Fully Supported By... Alan Greenspan!?
http://www.zerohedge.com/article/stunner-gold-standard-fully-supported-alan-greenspan
I saw this back in the 80’s. If you have Gold, it is time to take your profits and run because it is only heading South.
RE: I saw this back in the 80’s. If you have Gold, it is time to take your profits and run because it is only heading South.
When that happened in the 80’s Reagan was turning the economy around and confidence was returning.
If what you say is true, then the economy seems to be similarly turning around in 2011... and people have more confidence in — the dollar, the economy, the stock market, and tame inflation.
The 80’s had Reaganomics, now we have Obamanomics. This is a short term trend based on paper not physical. Demand for physical is at record highs world-wide. The super-rich and governments are buying huge amounts of the stuff. The Chinese have banned the export of Gold and are buying up any form of silver then can get. This may be the last best buy opportunity for a long time.
Don't be surprised if, by the end of the year, that there is a shortage of nickels - or a "new improved" version (i.e. debased) is released, which will once again validate Gresham's Law.
I said awhile back gold might top around $1400. I think it’s going to pull back for awhile.
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