Gold traded down today on concerns about the upcoming Fed meeting – off $15.67 at $1307.40. Silver took an even bigger hit on a percentage basis, down 36¢ on the day at $17.18. In early Asia trading both are sideways at the $1309 and $17.20 levels respectively.
Gold’s sell-off started early in the day and did not encounter resistance until the price neared the $1300 level. Ordinary profit taking should not be ruled out. Reuters reports tonight that Friday’s “U.S. data showed hedge funds and other speculators had raised net long positions in the precious metal for nine straight weeks.”
Correction aside for a moment, gold is up for the year when measured in the major currencies. Here is the scorecard through today’s trading:
British pound –> +4.8%
Euro –> +2.7%
Japanese yen –> +10.3%
Chinese yuan –> +10.6%
US dollar –> +13.6%
For more insights on today’s market activity, please scroll below. . . . . . .
Quote of the day
“A disgraceful milestone was reached this week when US government debt busted through the $20 trillion level and quickly went over $20.1 trillion. Can $21 trillion, or $25 trillion, be far ahead? Why not $40 trillion, so our grandkids and their grandkids can be even more indebted to the Chinese and other countries that buy our debt but aren’t very nice to us.” –– John Crudele, New York Post
“Few Americans know that, just after World War II, the United States owned most of the gold bullion on earth – about 22,000 metric tonnes.” So begins the September issue of News & Views under the headline When the United States Owned Most of the Gold on Earth. What happened next laid the foundations for today’s massive federal government debt, a long-term secular bull market for gold and a long-term secular bear market for the dollar. Herein lies the essential rationale for gold as a long-term portfolio asset, safe haven and friend to the concerned citizen.
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