I had discussed my outlook for gold and precious metal stocks in the latest All That Glitter Post, discussing how a lower price of gold (among other details of the precious metal timing models) would make the sector look more attractive. Knowing this, I read the following two articles attesting the latest sell off to funds and other institutional investors using gold and the precious metal complex as a source of funds.
First was this post at Zero Hedge.....
Whether it is leveraged AAPL traders forced to sell winning collateral to meet margin calls, correlation-driven algos running stops down and up, or simply the whims of worried custodians managing risk for their clients' holdings; one thing is sure - someone (or more than one) has been a size seller of precious metals in the US-day-session-open to Europe-close period for four days in a row now...
Second this article at Mineweb coming at the sell off from a similar, but slightly different angle. An excerpt...
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WHOLESALE gold bullion prices fell below $1710 an ounce Friday morning in London, dropping below that level for the second day in a row, as stocks, commodities and the Euro all fell and US Treasuries gained ahead of negotiations among US lawmakers about the so-called fiscal cliff.
"Gold is being seen increasingly as a source of cash," says Simon Weeks, head of precious metals at bullion bank Scotia Mocatta.
"Liquidation of gold can cover losses elsewhere."
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I would welcome lower gold prices and think this would make the precious metal complex more attractive, all else remaining equal.
First was this post at Zero Hedge.....
Whether it is leveraged AAPL traders forced to sell winning collateral to meet margin calls, correlation-driven algos running stops down and up, or simply the whims of worried custodians managing risk for their clients' holdings; one thing is sure - someone (or more than one) has been a size seller of precious metals in the US-day-session-open to Europe-close period for four days in a row now...
Second this article at Mineweb coming at the sell off from a similar, but slightly different angle. An excerpt...
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WHOLESALE gold bullion prices fell below $1710 an ounce Friday morning in London, dropping below that level for the second day in a row, as stocks, commodities and the Euro all fell and US Treasuries gained ahead of negotiations among US lawmakers about the so-called fiscal cliff.
"Gold is being seen increasingly as a source of cash," says Simon Weeks, head of precious metals at bullion bank Scotia Mocatta.
"Liquidation of gold can cover losses elsewhere."
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I would welcome lower gold prices and think this would make the precious metal complex more attractive, all else remaining equal.
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