Gold Slaughter
October 23rd, 2008Via: MarketWatch:
Gold futures fell 5% Thursday to below $700 an ounce for the first time in 13 months, as fund liquidation and the U.S. dollar’s rise continued to pound commodity markets for a second day. Copper slumped more than 6%.
Gold for December delivery dropped $36.70 to $698.50 an ounce on the Comex division of the New York Mercantile Exchange, trading below $700 for the first time since September, 2007.
“Speculative selling continues to hammer commodity prices,” said James Moore, an analyst at TheBullionDesk.com. Meanwhile, gold was also “under pressure as the dollar rallied.”
Gold’s losses followed broad declines in commodity markets. Crude oil was trading lower after the previous session’s big drop. Major stock indexes also moved lower.
Gold is often seen as an investment safe haven whose prices tend to rise when the economy falls into troubles, but its recent slumps have defied conventional wisdom. Gold has fallen for 10 out of 11 sessions since Oct. 8 and has lost more than $200 an ounce.
“The fact that gold did not head higher during the current leg of the crisis seems to reflect a combination of the rise in the dollar, deleveraging of commodity positions, sales to meet margin calls, and the unwinding of the long gold, short dollar trade,” wrote Natalie Dempster, an analyst at the World Gold Council.
The U.S. dollar continued its rally Thursday, putting more pressures on gold. A rising dollar tends to reduce gold’s appeal as an investment alternative.
I think it odd that gold is called a commodity. Actually gold is MONEY – a real medium of exchange. All the old western movies showed people biting into it to determine whether it was real.
ALL of the worlds currencies are declining. But I’ll betcha if it comes down to it those of us who hold metals will have money. Real money, not some floating piece of paper that could also be used as toilet paper. Sheesh. I wish I had more of that electronic funny money that I could trade in right now. Can you not tell I am bullish for gold? SNORT. STOMP. Or whatever other sounds a bull makes.