Markets plunged but a resurgent US dollar pushed gold well below the $1,700 mark, The Street reports. At press time Comex pegged the precious metal at $1,673.80 with silver down to $32.52. Meanwhile the US dollar index hit a seven-month high. The turnaround comes as stocks tanked on the Fed’s plan to buy longer-term treasuries and the US dollar became the safe haven du jour.
Some analysts suggested the mood of investors has changed from fear to anger. “It’s an absolute tantrum by most markets,” said Jon Nadler of Kitco.com. “It’s possible that we have one more push to the upside, possibly above the previous highs in the low $1,900s, but that has to come about quickly and it has to first come on not breaching the low $1,700.”
James Moore, a research analyst at Fastmarkets.com, sounded more optimistic. “Liquidation selling in gold and silver seems to be outweighing its safe-haven buying but we would expect that to return before too long.”
Ben Bernanke’s plan to move $400 billion into longer-term debt shoved the Dow to its lowest level since December 2008, now 16% below its April high and heading toward the 20% mark associated with a bear market.
Mining stocks were among the market casualties.
“Everything is selling off,” said Michael Gayed, chief investment strategist at Pension Partners. He told Dow Jones Newswires, “The reaction here is a bursting of the bubble in the face of the Fed. No matter what the Fed does, it’s not going to make a difference this time around.”
by Greg Klein