Gold Continues Its Plunge

Thanks to the Fed’s Operation Twist, gold continues to fall:

Gold is often sold off as a means of raising dollars when funding conditions deteriorate, much as they did in late 2008 with the onset of the credit crunch that ensued from banks withholding lending because of their concern over counterparty exposure to toxic U.S. mortgage-backed assets.

“Gold is one of the few assets that remains in positive territory this year, in a sense it is one of the last assets standing, and because of this as investors head for cash they sell the assets that have performed. Essentially gold is a victim of its own success as liquidity trumps,” wrote UBS analyst Edel Tully in a note.

Silver came under fire, falling by as much as 16 percent at one point in the day and set for its worst three-day fall on record, having lost more than 25 percent in this period.

The spot price was last down 6.7 percent at $29.00 an ounce, its lowest since last November.

Platinum fell by 3 percent to $1,559.25 an ounce, its lowest since May last year, while palladium recovered from an earlier 5.0-percent fall to trade up 0.4 percent on the day at $637.22 an ounce, around its lowest since last October.

Posted by on September 26th, 2011 at 10:40 am


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.