Gold finishes up $30 on the day on safe-haven buying, possible short covering
Gold finished the day up a solid $30 and well over the $1200 mark at $1224.50. Silver finished 27¢ higher at $14.60. The mainstream financial media was in a huff all day on who to blame for the stock market plunge – the White House or the Fed. The markets though, with all due respect, do not care who’s to blame. It is the effect that has investors worried, not the cause.
This is the first time in 2018, a cursory review tells us, that gold has gone up when the Dow Jones Industrial Average has gone down more than 1000 points – a break with recent trends that speaks to a possible resurgence of gold’s safe haven status. Too, we should not overlook the possible role of short-covering in today’s rally. Speculators have built-up a record short volume on the COMEX and will need to reverse those positions in order to lock-in profits. As an early indicator that sentiment might be shifting among funds and institutions, gold ETFs yesterday recorded net purchases of eight tonnes – “the first daily inflow since July” according to Commerzbank.