Tuesday, September 9, 2008

Metals & Oil Fall Off A Freakin Cliff!

{We here at SOC are longtime advocates of the precious metals complex. the metals have been good to us in the past, but now......not so much. We're as bewildered as the experts on the apocalyptic drop of the metals (and oil to some degree) and don't see any sort of fundamental change to precipitate all this chaos. The Fannie and Freddie debacle hoisted on the American taxpayers should have been signal for new highs, yet nothing. Russia reasserting it's Cold War ethos should have sent energy prices spiraling.....again....not so much. SOC is sitting tight and patching the holes; we're hopeful the market regains it's senses and realizes the doom of the dollar.}
Gold falls to 10-month low as crude oil slides
By Moming Zhou, MarketWatch
Last update: 11:54 a.m. EDT Sept. 9, 2008
NEW YORK (MarketWatch) -- Gold futures fell for a seventh straight session Tuesday, sliding to the lowest in nearly 10 months, as falling crude-oil prices reduced investment demand for gold as a hedge against inflation.
Other metals contracts also felt selling pressure.
Gold for December delivery sank $16.70, or 2.1%, to $785.80 an ounce on the Comex division of the New York Mercantile Exchange.
It dropped to $780.20 earlier, the lowest since November. All told, the benchmark gold contract has slumped about $50 an ounce in the seven trading sessions since Aug. 28.
In the energy market, crude futures fell more than $2 to below $105 a barrel amid expectations that the Organization or Petroleum Exporting Countries will keep production quotas unchanged at its meeting in Vienna.
"Gold continued to trade lower as oil prices fell further following news that OPEC sees its market essentially in balance and will not curtail current output levels," wrote Jon Nadler, senior analyst at Kitco Bullion Dealers.
Mark O'Byrne, executive director of Gold & Silver Investments, called $780 "an important support level." A close below that level could see a further retreat to $750 an ounce, he added.
Also contributing to the move in gold prices was the dollar, which firmed following a Monday rally that sent the greenback to the highest in one year against the euro.
A stronger dollar reduced gold's appeal as an investment alternative.
"With little speculative interest at the present time, there's little to drive the metal significantly higher," said Brien Lundin, editor of Gold Newsletter.

The Commodity Futures Trading Commission reported that as of Sept. 2, speculative long positions, or bets prices will rise, outnumbered short positions by 93,191 contracts on the Comex, down 43% from a month ago.
In spot trading, the London gold fixing prices, used as a benchmark for gold to be delivered immediately, stood at $799.75 an ounce Tuesday morning, down $8.25 from Monday afternoon. Silver fixing stood at $12.04 an ounce, down 34 cents from the previous session.
Rounding out the action in metals futures, silver for December delivery fell 1.1% to $11.94 an ounce, December copper was down 0.6% to $3.07 a pound. October platinum slid 5.2% to $1,282.50 an ounce, while the December contract for palladium tumbled 9.6% to $240.10 an ounce.

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