Kitco Metals Roundup:Comex Gold Hammered Lower, Hits 3-Month Low, On Panic Selling

Kitco News ^ | 12/14/2011 | Jim Wyckoff

[Mariner]

(Kitco News) - Comex February gold futures prices careened lower and hit a fresh nearly three-month low on follow-through selling pressure from the strong losses posted in afternoon trading Tuesday. It was a “risk-off” trading day in the market place Wednesday, and that was very bearish for the precious metals. A stronger U.S. dollar and sharply lower crude oil prices were also major bearish factors for gold Wednesday. Fresh, serious near-term technical damage has been inflicted in gold this week. February gold last traded down $76.80 at $1,586.60 an ounce. Spot gold last traded down $47.00 an ounce at $1,584.50. March Comex silver last traded down $2.365 at $28.89 an ounce.

Fresh developments on the European Union debt crisis scene include higher Italian bond yields Wednesday and some fresh, weak economic data coming from the EU. That pushed the Euro currency to a fresh 11-month low Wednesday, which in turn boosted the U.S. dollar index.

The U.S. dollar index traded higher Wednesday and hit a fresh 11-month high. The dollar index bulls have the solid overall near-term technical advantage, which is a major bearish underlying factor for the precious metals markets. Crude oil and many other commodity market prices were lower Wednesday morning, with crude sharply lower, which was also negative for the precious metals.

[Mariner]

How low can it go?

[Mariner]

Ping

[jpsb]

I think it costs $800ish to mind gold, so $800 or a little lower would be a pretty firm bottom.

[Vigilanteman]

Silver is generally a better investment than gold. More industrial uses = broader base = less speculation = less volatility. I think if you check the last decade or so, silver has even outperformed gold.

[tcrlaf]

PAPER Gold has begun to unwind, and it will unwind fast after yesterday’s Chicago Merc revelations about COrzine, and what he did with customer Gold.

MEanwhile, Citibank comes out today with a Real Gold target price of $2,400 by mid-summer, with the possibility of as much as $6,000 by mid-2013, if economic conditions continue to decline. (TRANSLATION: If Obama is re-elected)

[JakeS]

How low can it go?

Only God knows, but this would be a good time to buy your kids one ounce rounds and ingots, the rounds are prettier. You can probably get them for around $31 or $32 each today. Not bad for a stocking stuffer that will surely go up in value faster than underwear or tooth paste.

[RegulatorCountry]

$1,200

[Glenn]

Could be end of year moves. Could be that the bigger players needed money to backstop other investments or for investing in other opportunities in this goofy market.

Nothing about this seems like a 'panic' to me.

[Mariner]

"$1,200"

Winner.

I originally predicted $1200 by end of year back in July or so.

It may take a couple of months beyond that, but the deflation bug is bigger than the Gold bug this time around.

Cash is the only place to be over the next couple of years...then buy Gold again at about $750.

[Vince Ferrer]

less volatility

"Less Volatile" is not something I would use describing silver. It is volatility on steroids.

Just today:

Gold -3.52%

Silver -6.16%

[politicket]

I expect to see silver sub $10/oz and gold sub $600/oz within the next three to five years, or sooner.

Commodity prices will not perform well in the depths of the deflationary depression that is here, and will be getting much, much worse.

[politicket]

I expect to see silver sub $10/oz and gold sub $600/oz within the next three to five years, or sooner.

Commodity prices will not perform well in the depths of the deflationary depression that is here, and will be getting much, much worse.

[BenKenobi]

For those of you playing at home.

I also correctly predicted that the Dollar would strengthen against Gold.

Glad I bought up all the USD I could.

[jiggyboy]

“The main reason traders cite for the sell-off is the weaker euro and stronger dollar, making dollar denominated metals more expensive to own. But, there are other factors at play here as well.

“After a less than stellar year traders say hedge funds are seeing redemptions. “Everybody wants cash, liquidity is thin” says Bruce Dunn, Auramet Trading Senior Vice President.”

http://www.cnbc.com/id/44643824

[Vigilanteman]

Volatility isn't based on a one-day swing. It is based on a long term average. Silver outperformed gold on the recent swing up, it will naturally underperform it on a trend down. They move together, albeit at different rates.

Big money still prefers gold because it is easier to store.

[silverleaf]

so what did Corzine do with client gold?

[Sudetenland]

It's been pretty clear for sometime now that the gold vendors and the chicken littles have been pushing the price of gold ever higher. There has never been such a hard sell advertising push on gold in history. You can't turn on Rush, or Hannity or Beck without hearing about how the dollar is doomed and you need to be in gold from the advertisers and from Beck--who seem to be a wholly owned subsidiary of the global panic marketers.

Reminds me of the 70's and Howard Ruff with his survivalism cult. Beck's the Howard Ruff (or Lyndon LaRouche) of today.

[Signalman]

Cash is the only place to be over the next couple of years.

This is exactly what Harry Dent says in his recent book, "The Great Crash Ahead". We are entering/already in a deflationary period, not inflationary. Notice what has happened to the price of homes over the past few years?

Stocks and commodities will go down, cash is the place to be.

[RegulatorCountry]

The only pm I bought I picked up just after 9/11, seemed like the prudent thing to do at the time. It wasn’t a substantial amount but it has done extremely well. I didn’t buy it for an “investment,” it was a SHTF thing, in my mind at least. Hindsight is 20/20, should have gone for it back then. Gold was less than $300/oz.

But, even with the recent declines, it’s still quintupled in ten years, and will have still quadrupled even if it falls to $1,200.

[RegulatorCountry]

The numbers I saw were gold -5.13% and silver -7.53% for the day. Bloomberg.