Gold drop hammers commodity producers ~~ gold off more than $90 an ounce over two days,....

MarketWatch ^ | March 20, 2008 11:04 a.m. EDT | Steve Goldstein, MarketWatch

[Ernest_at_the_Beach]

LONDON (MarketWatch) -- With gold off more than $90 an ounce over two days, commodity producers were hammered again Thursday, but banking stocks managed to rebound after U.K. regulators stepped in to quell rumors about the sector's health.

Gold and other metals remained under pressure amid calmer waters on Wall Street and ideas the Federal Reserve is no longer as unconcerned about inflation as previously believed after the central bank was somewhat less aggressive than expected in cutting its key interest rate earlier this week.

April gold futures were down $22.80 an ounce to $922.50, and silver and platinum futures also dropped sharply, leading the extractors of those commodities to also fall substantially. Read related currencies story.

Technical analysts at Credit Suisse suggested gold futures may test the $896 to $900 level an ounce, with the next support coming in at $876 to $880.

[djf]

Not the time to sell.

Time to back up the truck to the loading dock.

[Vermont Lt]

We’ve been buying gold every month for the past couple of years. Yeah, the couple hundred dollars worth from last month sting...but the several thousand from 2006 still feel pretty good.

As with anything else, moderation is the key.

[abigkahuna]

Nope, its ten thousand hedge funds facing margin calls unloading anything with cash value. Its a sell at any price to keep hope alive...

[babble-on]

I imagine that is what it is. Deleveraging in general, and this is the easiest and most attractive stuff to unwind, since unlike a lot of things on the book, it has a profit, and it is probably relatively less structured.

[rightinthemiddle]

Today’s Industry Highlights

Top Performing Industries % Change
Mortgage Investment +8.41%
General Entertainment +5.83%
Textile - Apparel Footwear & Accessories +5.54%
Residential Construction +4.90%
Broadcasting - Radio +4.33%

Worst Performing Industries % Change
Independent Oil & Gas -5.19%
Silver -4.45%
Gold -4.03%
Agricultural Chemicals -4.00%
Foreign Regional Banks -3.74%

from yahoo.biz

[Toddsterpatriot]

I like it!

[petercooper]

Also when you see a big bear on the cover of every financial magazine around it’s time to buy stocks (that means now). Conversely, when you see “How to Trade Options” on the cover of BusinessWeek, it’s time to sell stocks (that was an actual cover of one of the mags in early 2000)

[Michael81Dus]

Peter, we haven´t seen the bottom of the baisse right now. Nahh, this is not the end (of the baisse). It is is not even the beginning of the end. But it is, perhaps, the end of the beginning!

[martin_fierro]

lol

[Afronaut]

“We have absorbed a little more than half of the expected losses in the housing decline. We have seen only a third of the housing price decline that we expect.”

- Freddie Mac CEO Richard Syron, March 2008

Folks this it the the bottom of the 2nd inning, The 3rd hole, the middle of the first quarter,

you ain't seen nothing yet!

[rellimpank]

-—if you were the owner of one you would be aware of what the cost of diesel fuel has done to production costs in the last couple of years-—you would indeed feel the pain—

[george76]

They are selling what they can ( as selling what they would like to sell has no buyers ).

[Ernest_at_the_Beach]

My comment on “the bottom” was relative to the stock market....could be the bottom for the dollar and the GDP...housing is another story...

[jsh3180]

“””IBs selling off commodities to raise cash””””

__________________________________________________________

You are indeed correct about this. Hedge funds who operated on 10% cash and 90% margin until 2 days ago are dumping gold and commodities. In an effort to raise cash, investment banks have raised margin requirements on hedge funds and commodity pools. Massive margin calls along with a bounce in the US$ is the selling pressure. Gold has stabilized at about $920-$925 and the bounce in the $US Dollar Index is going to be short lived.

That’s IMO.

[Ernest_at_the_Beach]

Related thread:

The Great Unwind has begun, Citigroup warns (de-leveraging sweep)

[LurkingSince'98]

I’ll buy it from you at spot.

Lurking’

[LambSlave]

That’s exactly my take also, for what it’s worth. Today is OPX, but come Monday I think that in terms of the stock (and bond) market we may be headed back into the storm.

[B4Ranch]

Publius, good call!

george76, are you gonna buy more today?

[Ernest_at_the_Beach]

CNBC had someone on that said this drop in Gold is just temporary....

[Ernest_at_the_Beach]

>New Deutsche Bank ETNs that short gold rack up gains on metal's plunge

**********************EXCERPT************************

ETF FOCUS
Digging gold by doubling down
New Deutsche Bank ETNs that short gold rack up gains on metal's plunge

BOSTON (MarketWatch) -- An exchange-traded note that shorts gold by doubling down on futures prices rose about 14% in just two days this week and was up again Thursday as the metal and other commodities continued to plunge following the Federal Reserve's rate cut and inflation warnings.