GS: Gold Seeker Closing Report: Gold and Silver Fall Markedly With Oil and Stocks
Gold fell nearly 2% in Asia and London and fell even further in New York to as low as $828.95 by late morning before it rebounded $13.60 from that low in the last couple of hours of trade, but it still ended with a loss of 4.5%. Silver followed a similar pattern on its typical accelerated scale and ended with a loss of 12%.
Euro gold fell roughly €19 to about €609, platinum lost $60 to $971, and copper fell nearly 15 cents to about $2.65.
Gold and silver equities steadily fell for most of the day and ended with over 15% losses.
Tomorrow at 8:30AM EST brings September’s jobs data. Nonfarm Payrolls are expected at -105,000, the Unemployment Rate is expected at 6.1%, Hourly Earnings are expected at 0.3%, and the Average Workweek is expected at 33.7. At 10AM is the ISM Services report for September expected at 50.0.
Oil fell on concerns over falling world demand while the dollar rose markedly versus the euro as “the European Central bank held rates steady and implied its door was open to easing.” Not only was Trichet tame on inflation, but he also voiced concerns over slowing economic growth and that certainly lowered the outlook for not only weak European growth relative to US growth, but also for global economic strength overall.
Treasuries rose as the Dow, Nasdaq, and S&P fell on bailout uncertainty. The senate passed the plan last night, but the bill still needs to pass the House tomorrow after previously failing earlier in the week and many are uncertain that the bill will help solve the problem even if it is passed. Much worse than expected economic data was not to encouraging to bulls either.
Among the big names making news in the market today were the SEC, Marriott, GE, and Constellation Brands.
I have no doubt that $1650 will come. My concern is not that it will not happen, but that I am much too conservative in my long-term price objective since 2000.
If major banks can be torn apart how can we have faith in the small local institutions that hold most of your ready cash?
When I said “This is IT,” it is not something that I take lightly. Never in 49 years in finance have I seen a set of circumstances so challenging to the man in the street.
What I am getting at is a simple question. Are you prepared? You have heard us talk repeatedly on removing financial intermediaries between you and your assets, but the time has come for us to recommend going one step further:
Hold enough cash at your household to last you a month or two. It may be largely unnecessary for the majority, but what do you have to lose? If your bank should fail this will save you a lot of grief in the short term. If they do not, you still have all your cash that can easily be deposited back into your account.
Unless the LIBOR rate drops sharply we are facing a planetary financial crisis next week.
For God's sake protect yourself.
Gold and gold related items will be the only true storehouses of wealth. The bailout bill is powerless to reverse what is now happening.
This is a modern day Weimar happening right before our eyes.
Regards,”- Jim Sinclair, JSMineset.com
“December Gold closed down 43 at 844.3. This was 9.3 up from the low and 28.5 off the high.
December Silver finished down 1.65 at 11.12, 1.13 off the high and 0.04 up from the low.
While the gold bugs can still hold out hope that the US House will stumble in their effort to pass a bailout package and the gold bulls can also hope that the financial troubles continue to surface in Europe, the slide in prices Thursday highlights at least some tempering of anxiety in the marketplace. However, the loss of some flight to quality concerns wasn't the only thing driving down gold prices on Thursday as gold saw pressure from a number of outside market forces. In fact, with a sharp slide in oil prices, massive weakness in the US equity market and a soaring Dollar, the outside market forces were really weighing on gold.
The silver market saw a massive broad based washout on Thursday as the market was hit with what appeared to be financial and physical commodity related selling themes. With massive declines in a host of physical commodity markets and the US factory orders report showing recessionary type data, it wasn't all that surprising to see silver suffer historical selling pressure. In the end the market seemed to be suggesting that without a total financial crisis, many longs were unwilling to hold onto silver.”- The Hightower Report, Futures Analysis and Forecasting