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Nickelless
Administrator
USA
5580 Posts |
 Posted - 10/22/2008 : 23:12:51
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Gold prices collapsed Wednesday, plunging to a 13-month low as a stronger dollar and growing fears of a global recession spurred investors to yank money out of commodities.
A barrage of worrisome corporate earnings has deepened investors' pessimism about the direction of the economy, prompting them to shift funds into less risky assets like government bonds. At the same time, a sharply stronger dollar is feeding selling of commodities bought as a hedge against inflation and weakness in the U.S. currency.
Gold for December delivery fell $32.80 to settle at $735.20 an ounce on the New York Mercantile Exchange, after earlier dipping to $720, the lowest level since Sept. 4, 2007.
"We have now come full circle .... The remaining question now emerging is: has gold seen its lows, or are we at the start of a phase in the mid-to-high $600s? There is plenty of uncertainty on that front," Jon Nadler, analyst with Kitco Bullion Dealers, said in a note.
Other precious metals also tumbled. December silver fell 61.5 cents to settle at $9.46 an ounce on the Nymex, while December copper dropped 14.15 cents to settle at $1.8655 a pound.
In energy trading, oil prices fell below $67 a barrel to 16-month lows Wednesday after the government reported big increases in U.S. fuel supplies -- more evidence that the economic downturn is drying up energy demand.
Light, sweet crude for December delivery fell $5.43 to settle at $66.75 on the Nymex, after falling as low as $66.20. It was the lowest close for a front-month contract since June 13, 2007, when crude settled at $66.26.
In other Nymex trading, heating oil futures fell 14.13 cents to end at $2.0562 a gallon, while gasoline prices dropped 12.1 cents to finish at $1.5709 a gallon.
Meanwhile, agriculture futures fell on the Chicago Board of Trade.
Wheat for December delivery lost 31.25 cents to settle at $5.1775 a bushel, while December corn fell 26 cents to settle at $3.85 a bushel.
December soybeans lost 50.5 cents to settle at $8.6475 a bushel.
Falling commodities prices have come at heavy cost for producing countries. In Argentina, the steep pullback in the price of soy, wheat, corn and beef have slashed export income, a key source of government revenue.
In a surprise move, Argentina said Tuesday that would nationalize $30.1 billion in private pension funds in response to the global fiscal crisis.
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terminal99
Penny Sorter Member
53 Posts |
Posted - 10/24/2008 : 10:20:12
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| Why would gold go down on recession fears? I would think it should go up. |
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JerrySpringer
Penny Hoarding Member
669 Posts |
Posted - 10/24/2008 : 10:38:47
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| Gold and other metals/commodities may be plunging because nowadays most everything is correlated in some joined-at-the-hips manner. The fear of not having cash to buy stuff is taking hold I think. Forget about using metals for a hedge or barter I am coming to believe for the time being. The market can quickly adjust to people who search out hedges and the market can fool them. It is almost like things are on a lazy susan and being rotated past our eyes and the market systematically kicking them below the belt. |
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Computer Jones
1000+ Penny Miser Member
USA
1112 Posts |
Posted - 10/24/2008 : 21:44:30
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"Why would gold go down on recession fears? I would think it should go up."
You are correct, prices should go up, unless they are being manipulated by the BIG players (Banks) trying to cover as much of their losses as they can by selling short and reaping as much as possible as fast as they can.
Have no fear, reality will smack them in the pocketbook and prices will rise.
Buy low now, if you can find any, if you can!!! |
There's profit if you melt things!!
8{> |
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Tourney64
1000+ Penny Miser Member
USA
1035 Posts |
Posted - 10/25/2008 : 06:11:44
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| The dollar is going up because everyone is going to US Treasuries, because they are deemed safe vs. the market. Because so much money is being invested in US treasuries, the dollar strengthens. If the market wasn't losing 5-10% every week, the dollar would be plunging. At soime point the market will rebound and the dollar will plunge and commodities will soar. Buy your Gold, Silver, and Copper now while it's cheap. Invest in companies that will survive. Look for companies with dividend payouts. Companies like Dow Chemical which pays 7-8% on today's stock price, and has never lowered their dividend in 109 years. |
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JerrySpringer
Penny Hoarding Member
669 Posts |
Posted - 10/25/2008 : 13:27:41
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| How about adding copper to your site? If the SHTF, many of us are poised to become copper millionaires. LOL. |
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n/a
deleted
4 Posts |
Posted - 10/25/2008 : 13:29:53
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quote:
Originally posted by JerrySpringer
How about adding copper to your site? If the SHTF, many of us are poised to become copper millionaires. LOL.
We'll work on it. |
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Ardent Listener
Administrator
USA
4841 Posts |
Posted - 10/25/2008 : 14:02:45
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quote:
Originally posted by truemetalprices.com
quote:
Originally posted by JerrySpringer
How about adding copper to your site? If the SHTF, many of us are poised to become copper millionaires. LOL.
We'll work on it.
Just a reminder to all that we don't post advertisements for coin or metal businesses in forums other than the BUY, SELL, TRADE forums. You can also post a link to your coin or metal related business in your signature. But we are most happy to have such members here. |
Realcent.forumco.com disclosure. Please read.
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Think positive. |
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Ardent Listener
Administrator
USA
4841 Posts |
Posted - 10/25/2008 : 14:09:09
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quote:
Originally posted by terminal99
Why would gold go down on recession fears? I would think it should go up.
So do a lot of gold investors, it seems. In the long run it may go up because the goverments will increase inflation in order to get us out of a world wide recession. But in the short term a lot of investors are going into cash just to meet their obligatons. Tight credit doesn't leave a lot of extra cash around. |
Realcent.forumco.com disclosure. Please read.
All posts either by the members, moderators, and the administration of http://realcent.forumco.com are for your edification and amusement only. It is not the intent of realcent.forumco.com or its host to provide investment, medical, matrimonial, legal, security or tax advice and nothing posted here should be considered to be so. All rights reserved.
Think positive. |
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JerrySpringer
Penny Hoarding Member
669 Posts |
Posted - 10/25/2008 : 18:16:24
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quote:
But in the short term a lot of investors are going into cash just to meet their obligatons. Tight credit doesn't leave a lot of extra cash around.
Yes, and that is why cash flow will be a holy grail for the economy IMHO. I think we are seeing a contraction of money right now. Amazing how it is such a macroscopic situation unfolding. Cash is king right now or at least next in line for the throne. |
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Ardent Listener
Administrator
USA
4841 Posts |
Posted - 10/25/2008 : 19:44:10
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quote:
Originally posted by JerrySpringer
quote:
But in the short term a lot of investors are going into cash just to meet their obligatons. Tight credit doesn't leave a lot of extra cash around.
Yes, and that is why cash flow will be a holy grail for the economy IMHO. I think we are seeing a contraction of money right now. Amazing how it is such a macroscopic situation unfolding. Cash is king right now or at least next in line for the throne.
That became more clear to me tonight as the extended family had dinner out. My brother-in-law is a developer and he has contractors asking him to pick out which building of theirs he wants in payment of their debts. He doesn't want buildings because he can't make payroll with buildings. Cash is king right now and pennies and nickels are cash and let's not forget it. |
Realcent.forumco.com disclosure. Please read.
All posts either by the members, moderators, and the administration of http://realcent.forumco.com are for your edification and amusement only. It is not the intent of realcent.forumco.com or its host to provide investment, medical, matrimonial, legal, security or tax advice and nothing posted here should be considered to be so. All rights reserved.
Think positive. |
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JerrySpringer
Penny Hoarding Member
669 Posts |
Posted - 10/25/2008 : 20:02:41
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| Budget people, B-U-D-G-E-T! |
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Ardent Listener
Administrator
USA
4841 Posts |
Posted - 10/25/2008 : 20:13:06
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quote:
Originally posted by JerrySpringer
Budget people, B-U-D-G-E-T!
Soon they will tell you that it is your duty to get out there and buy something. And in theory it sounds logical that if we all just ignored the recession and acted like it wasn't there it would just go away. But we are in this mess for good reasons and to throw your money around won't end the recession, but it will transfer your money into the hands of someone else. |
Realcent.forumco.com disclosure. Please read.
All posts either by the members, moderators, and the administration of http://realcent.forumco.com are for your edification and amusement only. It is not the intent of realcent.forumco.com or its host to provide investment, medical, matrimonial, legal, security or tax advice and nothing posted here should be considered to be so. All rights reserved.
Think positive. |
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Gold prices plunge on recession fears, dollar gain
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