Gold Cheaper in Real Terms Now Than it Was at $400, Wits Gold's Adam Fleming Says
Published: May 23, 2012 by GoldSpeculator
"It was obvious [at least to me] that the precious metals prices had to be 'encouraged' to decline."
- John Kenneth Galbraith
There isn't a lot to say about the gold and silver price action that I haven't already mentioned further up in this column. Certainly some of yesterday's drop in gold and silver prices that began at 10:45 a.m. was currency related...but as I said earlier, it was obvious [at least to me] that the precious metals prices had to be 'encouraged' to decline.
Yesterday, at the close of Comex trading, was also the cut-off for this Friday's Commitment of Traders Report. The declines in both metals that occurred after 1:30 p.m. Eastern time won't be included in that report. Too bad.
We are nowhere near the lows of a week ago in either silver or gold...yet...so the only speculative longs that have been forced to sell are the ones placed during the rally late last week. Because of that, it's hard to imagine that there will be any improvement in Friday's COT report based on the price action during the reporting week. Of course part of the rallies we saw last week might have been of the short covering variety, but if that was the case, it was well hidden by spread trades.
In Far East trading, both gold and silver got sold off once trading began on their Wednesday. Gold was down ten dollars...and silver was sold down over 60 cents about a half an hour before London opened. The dollar index rose about twenty basis points from its New York close, but has since lost all that and a bit more, so its somewhat of a stretch once again to say that all of gold's losses were currency related. Volumes are similar to what they were at this time yesterday...heavy.
And as I hit the 'send' button at 5:20 a.m. Eastern time, gold is now down about twelve dollars...and silver, which had dipped as low as $27.50...down 70 cents from Tuesday's close...is now 'only' down about 55 cents. The dollar index, which had been down a hair earlier, popped a bit...and is now basically unchanged from yesterday's New York close.
I have no idea what will happen pricewise during the Comex trading session today, but it's pretty much a given that it won't be without incident.
See you on Thursday.
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