Posted on 12/14/2011 1:41:43 PM PST by 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.
(Excerpt) Read more at kitco.com ...
I was just looking at my little app that tells me the prices at the time I wrote the post, Bloomburg is probably quoting London fix times.
I have to wonder if the MF Global imbroglio has anything to do with the commodity price crash.
Helicopter Ben will happily print up some more for you :)
US Real Estate is THE single largest asset class in the world, by far.
Follow it and you will know where we are going macro-economically.
We HAD one big inflation from '95 to '07. Big one.
Now the bubble has burst.
Sure, central banks will try to prop things up...but for the next couple of years we are in for inexorable, grinding deflation...and have been for 3 years already.
Eventually central banks will resort to issuing checks for $10,000 for every man, woman and child on the planet. About 6 months before that is when you want to buy metals.
I've been telling folks to buy cash for at least a year.
Buy and hold...both in the bank and under your mattress.
Cost per oz is a slightly deceptive measure. Right now everybody is going balls to the wall and processing some very marginal ores. Even there, some costs are around $300 while others are above $850. Thus, using those figures to determine a likely bottom might be troublesome.
It's coming?
Yeah, some of that can happen and it'll look bad.
But worse than that, it will be steady and long-lasting...grinding on for months...even a few years.
That depends on how you define "cash." Federal Reserve Notes under the mattress or some derivative based security like a money market fund or a demand deposit in an insolvent bank or whatever. As for me, I bought AU big today. Just in case...
Bu8t, don't think a $40 relief is real relief.
The central banks of Europe need cash, and they need it now.
Physical cash and demand deposits. Savings and checking accounts. $20 and $100 bills.
M1.
I too wonder about that.
The IM Global disaster is not being fully reported in the press, but the effects must be wideranging.
It is also possible that a lot of gold bullion is hitting the market because of the events in Libya - Gaddafi held large reserves, which are most probably now being sold to reward NATO.
“After a less than stellar year traders say hedge funds are seeing redemptions. “Everybody wants cash, liquidity is thin”
The same thing happened in 2008. Gold fell from $1000 to $750 then.
The European Central Bank so far has resisted creating new cash to bail out the sovereign debt and European Banks but they will do so if they want to avoid an absolute economic crash and depression.
Politicians will almost always opt for free spending with the threat of high inflation as a fix to avoid a deflationary depression.
The wild card is China’s runaway development crashing like our housing bubble did. That would make a perfect storm of economic collapse for the world economy.
They just put a 20 percent tariff on American cars so a trade war could be starting to add to the mix.
It's never too late...
Gold is like every other futures exchange traded commodity. Given that speculators can control $20 of gold for every $1 of capital in their possession, any hint of a significant decline will cause a rush* for the exits. Nobody wants to risk turning a $100K nest egg into a $500K debt, something that a mere 30% decline in gold can do to a fully-leveraged futures speculator.
* Obviously, this goes both ways - the shorts get killed on the way up and the longs get killed on the way down.
Martin Armstrong has targets for a low in gold during this time period. Also predict years ago, when the dollar was crashing at the time, than the US$ could rally, maybe even to new highs in the future. The future is now.
I wish I could remember the person here on FR posting in a reply when the dollar was way down about how the ‘US dollar would end up being the tallest out of all the pigmy tribes of fiat’ or something to that effect. It was a classic.
Goldbug ping
Euro countries need liquidity......they have gold...they are sellors of massive amounts of pm’s right now in search of cash liquidity. When alot of one commodity overwhelms the market......price goes down.
In addition to unloading their gold, European banks are also selling their best, most-profitable businesses to raise capital, which will hinder long-term profitability… The same thing happened during the U.S. financial crisis. For example, Bank of America sold its profitable international credit card business to raise cash.
Helicoptor Ben will make a move to print.....but can it kickstart some inflation.......or just sit in banks investment portfolios again?
The dollar will be the tallest pigmy of the fiat tribe, despite it’s crappy underlying value.
12 posted on Tuesday, December 01, 2009 9:43:05 PM by pingman (Price is what you pay, value is what you get.)
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.