Gold price - a big bubble to CON small investors as usual.
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Gold and oil suffer heavy falls
By Javier Blas in London , Financial Times, 27 Nov 2009
Gold's reputation as a haven was dented on Friday after prices fell sharply as worries over Dubai's debt drove investors to park their money in US dollar-denominated Treasuries, driving the currency higher.
"We believe the events in Dubai have brought into sharper focus the elevated level of sovereign risk heading into 2010 and the potential pockets of US dollar strength that this can deliver," Deutsche Bank said in a note to investors.
In morning trading, spot bullion in London fell as much as 4.7 per cent to $1,136 a troy ounce, before recovering to about $1,160 an ounce, down 2.7 per cent from Thursday's last quote in New York.
Tobias Merath, head of commodity research at Credit Suisse in Zurich, said that gold's price decline was "exacerbated by the appreciation" of the dollar, but he pointed out that precious metals were holding up better than other markets.
"We do not think that the Dubai news will put an end to the precious metals price rally," he said.
Gold hit an all-time high of $1,194.5 on Thursday and investors have being buying heavily. Earlier this week, the US government said it had suspended sales of the world's most popular gold coin, the American Eagle, after running out of stocks.
In London, spot silver plunged as much as 5.1 per cent to $17.66 an ounce, before recovering to $17.98 an ounce.
Other commodities were also sharply down. Oil posted heavy losses as the dollar strengthened to $1.49 against the euro, up from $1.51 earlier in the week, after Dubai's woes raised questions over the health of the global economic recovery.
Olivier Jakob, head of Petromatrix, a Swiss-based energy consultancy, said that Dubai "will put in question the demand recovery led by emerging economies", critical for high oil prices.
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Gold and oil suffer heavy falls
By Javier Blas in London , Financial Times, 27 Nov 2009
Gold's reputation as a haven was dented on Friday after prices fell sharply as worries over Dubai's debt drove investors to park their money in US dollar-denominated Treasuries, driving the currency higher.
"We believe the events in Dubai have brought into sharper focus the elevated level of sovereign risk heading into 2010 and the potential pockets of US dollar strength that this can deliver," Deutsche Bank said in a note to investors.
In morning trading, spot bullion in London fell as much as 4.7 per cent to $1,136 a troy ounce, before recovering to about $1,160 an ounce, down 2.7 per cent from Thursday's last quote in New York.
Tobias Merath, head of commodity research at Credit Suisse in Zurich, said that gold's price decline was "exacerbated by the appreciation" of the dollar, but he pointed out that precious metals were holding up better than other markets.
"We do not think that the Dubai news will put an end to the precious metals price rally," he said.
Gold hit an all-time high of $1,194.5 on Thursday and investors have being buying heavily. Earlier this week, the US government said it had suspended sales of the world's most popular gold coin, the American Eagle, after running out of stocks.
In London, spot silver plunged as much as 5.1 per cent to $17.66 an ounce, before recovering to $17.98 an ounce.
Other commodities were also sharply down. Oil posted heavy losses as the dollar strengthened to $1.49 against the euro, up from $1.51 earlier in the week, after Dubai's woes raised questions over the health of the global economic recovery.
Olivier Jakob, head of Petromatrix, a Swiss-based energy consultancy, said that Dubai "will put in question the demand recovery led by emerging economies", critical for high oil prices.
