Thursday, April 20, 2006
Commodities 'Not A One-Way Bet'
A report on what happened today in the metals arena. "Gold and silver were batted away from earlier 25-year and 23-year peaks on Thursday, triggering a widespread sell-off across the commodities arena. 'Fund profit-taking caused the rally to stall, triggering further long liquidation, with the resulting sell-off in a largely one-way market causing metals to drop like a stone,' said James Moore."
"Spot gold touched $645.75 an ounce, the highest since November 1980, but subsequently fell to as low as $608.50. It steadied at $619.20/620.00 in late New York trade, against a quote of $633.70/4.50 late on Wednesday."
"Spot silver shot to a new 23-year peak of $14.68 an ounce, but later traded at $12.43/12.46, down sharply from the previous $14.60/14.63."
"'Has it done any damage, or is it just a correction in an upward trend? That‘s a tough call,' Stephen Briggs, metals economist said. 'It certainly reminds people that even commodities, with the euphoria surrounding them, are not a one-way bet the whole time. Up until today, we were getting into bubble-like territory,' he added."
"Silver futures in New York dropped by as much as 19 percent in the frenetic sell-off in metals Thursday, with a limit-down move prompting trading to be briefly halted. May delivery silver at the New York Mercantile Exchange‘s COMEX division plunged $1.9970, or 13.8 percent, to settle at $12.5250 per ounce."
"But, with oil prices not far from fresh record highs around $74 a barrel and tensions between Iran and the West over nuclear issues, gold was likely to remain in demand as a safe haven, analysts said. Expectations of further dollar weakness ahead was also cited as a price-supportive factor. 'My gut feeling is that it is not the end of the story for gold. Iran hasn‘t gone away, there is probable dollar weakness,' Briggs said."
"Platinum dropped to $1,097/1,102 an ounce in New York from $1,117/1,121, and well off a new record of $1,130. Palladium was down at $346/351 from $367/371."
"Spot gold touched $645.75 an ounce, the highest since November 1980, but subsequently fell to as low as $608.50. It steadied at $619.20/620.00 in late New York trade, against a quote of $633.70/4.50 late on Wednesday."
"Spot silver shot to a new 23-year peak of $14.68 an ounce, but later traded at $12.43/12.46, down sharply from the previous $14.60/14.63."
"'Has it done any damage, or is it just a correction in an upward trend? That‘s a tough call,' Stephen Briggs, metals economist said. 'It certainly reminds people that even commodities, with the euphoria surrounding them, are not a one-way bet the whole time. Up until today, we were getting into bubble-like territory,' he added."
"Silver futures in New York dropped by as much as 19 percent in the frenetic sell-off in metals Thursday, with a limit-down move prompting trading to be briefly halted. May delivery silver at the New York Mercantile Exchange‘s COMEX division plunged $1.9970, or 13.8 percent, to settle at $12.5250 per ounce."
"But, with oil prices not far from fresh record highs around $74 a barrel and tensions between Iran and the West over nuclear issues, gold was likely to remain in demand as a safe haven, analysts said. Expectations of further dollar weakness ahead was also cited as a price-supportive factor. 'My gut feeling is that it is not the end of the story for gold. Iran hasn‘t gone away, there is probable dollar weakness,' Briggs said."
"Platinum dropped to $1,097/1,102 an ounce in New York from $1,117/1,121, and well off a new record of $1,130. Palladium was down at $346/351 from $367/371."
# posted by Ben Jones @ 3:25 PM 
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I had a weird feeling yesterday when I read that silver was up 77 cents. In the 80's one particular 77 cent move up in silver was followed by a 90 cent drop the next day. Then several wide swings occurred over the next week or two.
Volatility often marks a cycle peak or trough, and the greater the degree of the cycle should see greater volatility. Like the analyst said, the fundamentals didn't change today.
Volatility often marks a cycle peak or trough, and the greater the degree of the cycle should see greater volatility. Like the analyst said, the fundamentals didn't change today.
I sure didn't read anything about the dollar suddenly looking healthy today... This was just profit taking.
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