Close X Cookies are necessary for the proper functioning of 24hGold.com. By continuing your navigation on our website, you are accepting the use of cookies.
To learn more about cookies ...
EnglishFrench
Gold & Silver Prices in

Apocalyptic mood in the gold and silver pit

IMG Auteur
 
Published : December 21st, 2012
376 words - Reading time : 0 - 1 minutes
( 2 votes, 5/5 )
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
0
comment
Our Newsletter...
Category : Market Analysis

 

 

 

 

Many market watchers are scratching their heads looking at the precious metals charts of the last trading days. Despite the fiscal cliff and possible downgrades of rating agencies looming over the US, and the Fed's announcement that it is going to be monetising debt at a rate of 1 trillion US dollars a year, gold just marked a new three-month low, falling below support at $1,700 and trading all the way down to $1,660 on Tuesday. Silver has been hit even harder and moved all the way down to $31 in yesterday’s session.

Many suggestions have cropped up as to why the metals are behaving so weakly, despite the overwhelming monetary fundamentals and against a falling dollar index, rising crude prices and robust equities: year-end book squaring, fiscal cliff hopes or the ratings upgrade for Greece. None of them really seem to qualify. A more likely explanation is that large commercial entities are using the low volume in the run up to the Christmas holidays to game the market. As pointed out in Alasdair Macleod’s recent analysis article, those banks hold a very large short position and therefore have an incentive to induce as much long liquidation as possible by raiding stop loss orders before covering.

Unfortunately this volatility is likely to continue in the four remaining trading days of this year. However as a physical investor this should not spoil your Christmas spirit. Long term participants in the precious metals will not be surprised by this behaviour, as they will recall last year’s price action when gold lost over $200 in December and silver dropped a full $6 up until the last trading day - only to recover as quickly as they dropped once January came around. To that extend it is encouraging to see a high level of despair in the metals pit, coupled with mischievous media attention as a contrarian sentiment indicator.

We must not forget that none of the debt problems in the developed world have been resolved in 2012 and the challenges for 2013 look even greater. With this in mind one could even regard the recent weakness in price as a window of opportunity to acquire some more shiny Christmas presents at a discount, in case you are still searching.

 

 

Data and Statistics for these countries : Greece | All
Gold and Silver Prices for these countries : Greece | All
<< Previous article
Rate : Average note :5 (2 votes)
>> Next article
Comments closed
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
Latest Comments
Total Eclipse
15:44The Recusant
"I’d like to hear [sic] an argument..." Historical statues typically honor or remember people of greatness, the beneficial contribution th...
Can a government surplus cause the economy to tank?
18 Auggfs543
Your dissection is incisive, Steve. You weren't refuting just this one writer. You were beating up on popular Keynesian fallacies.
Can a government surplus cause the economy to tank?
17 AugDRGEORGE
Thank you very much for that Steve. But please just don't 'leave it there'. The author of that article apparently intends to expand on that bullshi...
Smoke and Fire
16 Augaccording0
some things happen without collusion do you think that the stupid little rats of blm and antifa dont get paid to help wreck our socie...
Smoke and Fire
16 Augaccording0
James. Even a believer has to leave Zoar before he starves to death. Kudos for having the fortitude to write this.
The Folly of Democratic Socialism
16 AugFalconflight
It this Amerika, I reference it as Krony Socialism.
Stock Market Correction Hasn’t Begun to Begin! It Will (And North K...
16 AugJ.
This bubble has been deemed TBTP (Too Big To Pop). Central banks have outright said in public that they will do "whatever it takes" to prevent it....
GM Tests Fleet of 46 Robocar Taxis in SF: Driverless Car Timeline P...
15 AugDRGEORGE
Correct, correct, correct. And insurance will indeed be the major driver to widespread adoption. But why do I get aggressive scepticism or blank lo...
Most commented articlesFavoritesMore...
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS