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
Bitcoin in Perspective: Bill Gates Worth More, Gold 200 Times More
22 JunDavid C.1
Yes Mish, but bitcoin and the wealth and debt burdens of the world are fully backed by electrons which are very light. Unlike that 68 ft glob of m...
Absent Without Leave
21 JunS W.
Bail ins for sure. It was agreed at the G20 in Brisbane. You are not really a share holder. You are an unsecured creditor to the bank a...
Absent Without Leave
19 JunJ.3
Perhaps all the international shenanigans are the smoke and mirrors intended to obfuscate the view of the looming financial catastrophe. When the ...
Gold Price Cuts Post-UK Election Loss, ETF Investors Sell, Nasdaq D...
16 JunSam Maher
"the SPDR Gold Trust (NYSEArca:GLD) – saw its sharpest liquidation since March in the week-ending Thursday, with shareholders cutting the fund's si...
Things To Come
13 Junkevthorne3
If voting for 'parties' actually made a difference they would have not legalised it. Since 1914, it's been the supply of currency that has governed...
Things To Come
12 Jun Roygbiv0
And JHK ruined your life because he then voted for Obamba ? For Jim C.
Things To Come
12 JunJim C.-1
Surely Kunstler cannot be ignorant of economics, of the direct correlation between the production of wealth and Capitalism, and the subsequent crea...
The Escape from Collectivism - Jeff Thomas
10 Junsam_site-2
As I said before, collectivism depends on handicapping the public to create a nation of clinging, helpless, entitled patients and is a top priority...
Most commented articlesFavoritesMore...
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS