Gold traded mostly range-bound in the Far East between $910 and $915 then showed more volatility in London where it hit an intraday high above $920. Surprisingly, gold’s intraday low below $900 was reached after the Comex closed. It then gained some back later in electronic trading, finishing at $905.90/oz., down $9.90. Overnight, gold is up sharply.
Platinum hit its intraday low of $1025 at noon in New York then skyrocketed upward above $1045 during the next two hours where it stayed, ending near its intraday high at $1046.00/oz., up $15.00. Overnight, platinum has moved higher.
Silver didn’t move much through Hong Kong trading, staying mostly between $12.70 and $12.80. It then shot above $13.10 early in New York before settling down later in the day, closing at $12.91/oz., up 8 cents. Overnight, silver is way up. (Click here for charts)
Numerous factors have contributed to gold’s decline since Feb. 23, according to Jeffrey Nichols, managing director of American Precious Metals Advisors. The market has had to absorb a large amount of old scrap as record high prices in local currencies around the world – along with falling income and rising unemployment – has prompted many people to cash in their old gold jewelry.
“The combination of rising prices, growing secondary supplies, and surging investment buying created a simply unstable and unsustainable situation as higher prices attracted ever-greater volumes of scrap to be absorbed by investors,” Mr. Nichols said in a report. “Only an ever-increasing volume of investor purchases could keep prices near $1000 an ounce. As investor buying relaxed, prices just had to come down.”
“It’s important for gold-market participants to remember that long-term trends are always rational but short-term volatility is often emotional and sometimes just meaningless noise,” he added. “Although we remain bullish for the long-term and foresee more than a doubling of the gold price in the next few years, the immediate picture is less rosy… and the yellow metal remains vulnerable to further short-term selling.”
Although the yellow metal hasn’t made gains since it shot above the $1000 mark on Feb. 20, and has since lost about $90, we agree with Mr. Nichols’ assessment for the longer-term.
Source: What’s Going Down With Gold?
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