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Gold Plunges — What’s Going On

Why was gold down so sharply today -- in the face reportedly record demand from investors for bullion coins and small bars? News that European central banks sold 7.6 tons of gold in the week ending October 10th has certainly been a heavy burden on the price and helps explain why the metal could not move higher last week and, if selling has continued, in the past few days. But, it has been central bank gold loans -- even more so than official gold sales -- that has really pulled the rug out from under gold. Gold loans by central banks are an alternative -- and invisible -- means of ...

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Fresh Thinking About Gold

Here's a summary of what we've been saying in the past week about gold and the world macroeconomic picture: The idea that the U.S. dollar is suddenly stronger in recent weeks is a foolish notion.  Rather, gold is telling us that currencies, across the board, are weaker -- only the dollar a little less so than the euro, the UK pound, and other key currencies around the world.  In fact, as finance ministers and monetary authorities in the euro-zone continue to fiddle, longer-term economic and political cohesion becomes increasingly questionable.  In my view, the euro is just beginning a long ...

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Gold on the Rollercoaster — Volatility to Continue

To be honest, no one really knows if the rescue package just approved by Congress will restore order to world financial markets – but whatever the impact, I feel confident about the future of gold. For now – and the near future – gold is caught up in a mass liquidation of virtually all assets. Expect “high-stakes” volatility in gold to continue as world financial markets size up the U.S. rescue package . . . and realize that America’s politicians have thrown them a lifeline tied to a leaky boat. Retail gold investors – real people like you and me – have a different view of the world ...

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Gold — After the Fall

Gold has fallen more than $250 from its record high this past March to its recent low last week.  Most analysts are saying that gold has been pulled down by the drop in oil, the bounce in the U.S. dollar, and an easing of inflation expectations. But, in my view, gold’s swift decent in the past few weeks is a direct consequence of the unfolding global credit crisis.  In short, gold has been an innocent bystander to the financial hurricane hitting Wall Street and global markets. The yellow metal’s own positive fundamentals – and even its role as a safe haven in turbulent financial seas – ...

Gold Near $800

Gold near US$800 remains vulnerable in the near term to a stronger dollar but is underpinned by rising physical demand in key global markets, deteriorating macroeconomic and financial environments, accelerating inflation, and tight supply/demand fundamentals. A pop in the U.S. dollar, prompted by signs of deteriorating economic activity in Europe, has once again undercut gold, just as the metal looked like it might hold and build support around $830 an ounce. Having failed to establish a foothold over $830 an ounce, gold is greatly oversold but still looks technically vulnerable.  A ...

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Gold — After the Fall

Despite this morning’s sharp sell-off in precious metals, the key factors favoring gold, silver, and the platinum-group metals remain in place. Gold, in particular, has been acting much like a currency, reacting negatively to strength in the U.S. dollar in recent weeks, just as the depreciating greenback early this year was mirrored in gold’s swift run-up into four-digit territory.  And, the short-term outlook – for the days and weeks ahead – still depends very much on the fate of the U.S. dollar. Both big moves – first up to US$1034 and then back down to the $850 vicinity –reflect, in ...

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Jeff Nichols Talks About Gold

Gold’s recent strength has been fueled principally by a surge in investment buying.  Meanwhile, positive market fundamentals – having to do with trends in mine production, secondary supply, and fabrication demand – have played a supporting role in gold’s recent strong performance. As important as it is to take a periodic statistical snapshot of gold supply and demand, price developments in the short-to-medium term have less to do with these fundamentals and more to do with market sentiment, monetary policy and inflation trends, geopolitical events, and the resultant changes in investment ...