Gold slides for 5th straight session
Prices continue to fall on weakening demand in China and India.
Gold (-GC) was falling for the fifth consecutive day Wednesday because of two factors: the strengthening dollar and growing concern that demand is weakening in the world's two largest countries.
Gold for February delivery was dropping $28 to $1,567.50 an ounce at the Comex division of the New York Mercantile Exchange. The metal has traded as high as $1,595 and as low as $1,571.80 an ounce, while the spot price was down $20, according to Kitco's gold index.
Silver (-SI) prices for March delivery were down $1.38 at $27.36 an ounce, while the U.S. dollar index was gaining 0.4% to $80.18.
Gold was declining after a Chinese government crackdown on illegal gold exchanges raised concern that demand there would weaken.
China's central bank ordered all gold exchanges, with the exception of two official exchanges in Shanghai, to cease operations, according to a statement Tuesday. The two official exchanges, the Shanghai Gold Exchange and the Shanghai Futures Exchange, are enough to meet domestic demand for the metal, said the notice, released jointly by the People's Bank of China and the Ministry of Public Security.
The Chinese crackdown on illegal gold trading venues comes after an announcement earlier in the week that demand for gold from India, the world's second-largest country by population, may also decline. Indian imports of the metal may drop 50% this month as the rupee's tumble against the dollar continues for a fourth month, according to the Bombay Bullion Association.
The currency slid to 53.03 rupees to a dollar on Dec. 27, from 44.08 on Aug. 1. The lower rupee makes gold, a dollar-backed commodity, more expensive to buy in India.
Italy's successful bond auction also put pressure on the precious metal.
The country successfully sold 9 billion euros ($11.8 billion) in six-month bonds at auction Wednesday at a rate far lower than at its auction on Nov. 25. The Italian treasuries were sold at a rate of 3.251%, compared with 6.504% last month. 2013 year notes also sold at a lower rate of 4.853%, down from a yield of 7.814% on Nov. 25.
Italy's lower borrowing costs dampened chances of the European Central Bank printing more euros to stem the debt crisis, reducing demand for the metal as a haven against inflation.
EVERYONE said " gold is going over 2,000, the price of cars will soon be priced higher then Homes, We are all going to live in Enviromental Huts,
It was $1300 this time last year. Could be again soon.
Remember this about gold. You cannot eat it. You cannot drink it. It will not power a motor vehicle or make a plane fly.
The only people who profit when gold goes up, as it has since 2000, are guys like me who have mined it since it was around $35 an ounce.
Also the "brokers" that you suckers go to when you decide to "buy" some because you are scared that paper money is becoming worthless.
They also ream your back side when you sell it. Ever notice that? Or what the "broker" is driving and you aren't?
Just like always, the big shots got out in time and it is the retail level investor who was late to the party and will get fleeced.
Most of the previous comments are from fools. If things go so bad that you are worried about how you can't eat it burn it or run a generator with it- then LEAD in the form of ammo is what will REALLY MATTER. You and your peacenik friends can have all the seed money you want and when the guys from mad max show up you will be slaves unless you have enuf lead.
If things get really bad but not that bad, gold will be the 1st money used in a post barter economy.
As for the "bubble" business - gold demand has a fairly predicable cycle and this is the low period. The Indian wedding season is over -that is a big driver of demand in the Autumn. Thats all.
Some say you can't eat it or use it to fuel your car which is bull. I can take one Krugerrand to the pawn shop and live off it for a few weeks! If I want to sell 10, I can send them to an exchange and even do better!
At today's prices, I could have bought my home for a few hundred Krugerrands!
$1537 right now and falling! IF you bought any at $1000 or more, I advise you to sell it today!
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[BRIEFING.COM] Equities ended on their lows with the S&P 500 down 1.4%.
The S&P entered today's session with a week-to-date gain of 1.5% as investors expected reassuring words from today's Federal Open Market Committee Statement.
Stocks traded with slim losses until this afternoon's FOMC Statement and subsequent comments from Chairman Bernanke sent equities and Treasuries to their lows while also providing a significant boost to the dollar.
Today's Statement was ... More
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