GOLD: BIGGEST ONE DAY GAIN EVER
September 17th, 2008See the story below about the Feds shopping WaMu around…
Via: AP:
Gold prices exploded Wednesday — posting the biggest one-day gain ever in dollar terms — as fears of more credit market turmoil unnerved investors and triggered a flood of safe-haven buying.
Gold for December delivery rose as much as $90.40, or 11.6 percent, to $870.90 an ounce in after-hours trading on the New York Mercantile Exchange after jumping $70 to settle at $850.50 in the regular session. That was the biggest one-day price jump ever; gold’s previous single-day record was a $64 gain on Jan. 29, 1980.
The huge rally came after the government moved overnight to rescue troubled insurer American International Group Inc. with an $85 million bailout loan. The Federal Reserve stepped in after AIG, teetering on collapse from losses tied to the subprime crisis and the credit crisis, failed to find adequate capital in the private sector. The emergency measure came a day after Lehman Brothers Holdings Inc., a 158-year-old investment bank, filed for bankruptcy after failing to find a buyer.
Fearing more tightening of credit markets, investors reacted swiftly and began dumping stocks and socking money into gold, silver and other safe-haven commodities. Gold is especially attractive during times of crisis because the metal is known for holding its value.
Jon Nadler, analyst with Kitco Bullion Dealers Montreal, said buying accelerated as rumors spread across trading floors that another financial firm may be in trouble.
“The psychology right now has everyone asking, ‘Who’s next?,” Nadler said. “If another big bank falls, we could see an implosion and that has people very worried.”
The charts on gold made my eyes bug out today! That is some good news – the pace of everything else falling down has left me (imagine) speechless!
if the treasury is having to give emergecny funding to the fed for maintenance of its daily operations, how much longer before the sovereign funds / foreign central banks let an auction fail ?
the end is not too far away, now.
cybele
Back in the 1970s when there was some financial fluctuation I remember my piggie in-laws at the time and their piggie friends and colleagues talking for desperate hour after hour about how much gold to buy and when and oh, my God, are we all going to lose our second homes and our third cadillacs? Now the building where I work is filled with amoral 30-something traders and the talk in the elevators is nothing but deals and schmeals and wait-minute-I’ve-got-to-check-this-call. The “market” reflects the values and choices of gluttonous buffoons and amoral robots. I think about the 401k that is the only pension option offered by my employer anymore and laugh. What a joke! When is this theater of the absurd going to end already? I know the answer. Never. The players may change but the game will stay the same. At least laughing keeps you healthy.
In terms of inflation adjusted dollars, the single-day spike that occured on Jan. 29, 1980 was a bit larger. That was $64 in nominal dollars, so that would be at least $150 in today’s dollars.