Euros
Posted on 03/19/2008 3:57:41 PM PDT by bjs1779
NEW YORK (AP) — Gold futures had their worst day in nearly two years Wednesday, beaten down after a smaller-than-expected interest rate cut bolstered the dollar and diminished the metal's appeal as a hedge against inflation.
Other commodities also traded lower, with crude oil, silver, copper and agriculture futures all falling sharply as part of a broad commodities sell-off.
The Federal Reserve on Tuesday lowered interest rates for the sixth time since September, moving aggressively to counter growing turmoil in financial markets that led to the near-collapse of investment bank Bear Stearns Cos. The Fed cut its benchmark federal funds rate by three-fourths of a percentage point, helping to propel the Dow Jones industrials up 420 points Tuesday.
But the Fed's move fell short of the full one-point cut many investors had hoped for, propping up the battered dollar Wednesday and sparking a huge sell-off of hard assets from heating oil to platinum and soybeans.
"Things turned really ugly, really fast in the commodities complex today," Jon Nadler, analyst with Kitco Bullion Dealers in Montreal, said in a note. "Once the dollar started eaking out small gains this morning and crude oil started losing serious ground, the sell-off in precious metals gathered steam and left a wide swath of damage in its wake."
Gold for April delivery plunged $59 to settle at $945.30 Wednesday on the New York Mercantile Exchange. The 5.9 percent decline was the largest one-day loss since June 2006. Gold soared to an all-time high of $1,033.90 Monday, following the Fed-approved bailout of Bear Stearns by JPMorgan Chase & Co.
(Excerpt) Read more at ap.google.com ...
Did gold go down, or did the dollar go up?
Both.
The only possible result it could have is in lowering the value of the dollar.
But because all of the geniuses out there guessed that the Fed was going to be even more stupid and drop the rate a whole point, now commodities are down and our future is secure!
Putting my money in a mattress is sounding better and better every day.
Euros
gold is down because we are in a slowdown. all commodities took a hit today.
You woudn’t happen to have the DJIA for the last 10 years would you, adjusted for inflation?
And why is this portrayed as bad?
I’m looking forward to the time when it costs less than a penny to make a penny, or less than five cents to make a nickel.
If ever.
Yesterday, when the Dow, S&P and Nasdaq went up by almost 4%, the HUI was hammered for a 5% loss. This was the signal for a move on gold by the Fed and friends. At dinner with some of my rail colleagues last night, I explained what happened and said, "Tomorrow the PPT is going to hammer gold for $50 to show the world that everything is fine."
I was off by $10. It went down by $60.
Today the HUI dropped another 7%, which is about right for a 6% drop in gold, but I smell a rat. If I'm right, there will be more liquidation in gold tomorrow with another significant drop, perhaps in the $50-80 range.
As to whether this is just noise in a continuing bull market upleg or the beginning of a correction and long consolidation, I can't say. The latest upleg has been prodigious, so if the market consolidates, and then coils and twirls for a year before the next upleg, that's fine with me.
So the question is are we going to see one of those 1929 thingies or one of those Chinese water-torture 1965-1985 thingies.
Doesn't that look like it went nowhere for about 10 years now? Thanks for the chart, I didn't know where to find it. : )
bttt
dow 100,000?
the scale of that chart is curious.
And penalizing cash savers, such as myself.
All things being equal, gold should find support around 900.
1500+ is still in the cards within 12 months, imho.
We have brakes in place to prevent a 1929 thingie, at least all at once.
Economics are economics, and you can’t fool reality forever.
But you can slow down irrational moves, and I think that’s the goal here. Other than the housing market, the economy is pretty much on an even keel.
It’s not great and it’s not horrible, so the only thing we’re seeing are some pretty massive daily swings in our stock portfolios.
And frankly most of us are not buying or selling houses at the moment.
We’re seeing some pretty dramatic valuations in our stock portfolio day to day, but I try not to check it every day.
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