Gold falls below $1,400 again

The metal is in danger of giving up all its gains since its mid-April low. Some talk has gold falling to $1,250 an ounce.

By Charley Blaine May 15, 2013 6:27PM
Gold © Stockbyte/SuperStockGold (-GC) fell below $1,400 on Wednesday for the first time in nearly three weeks, giving rise to predictions it is headed lower still.

Silver (-SI) also moved lower, along with copper (-HG) and platinum (-PL).

Gold settled at $1,396.20 an ounce in New York, down $28.30 or 2% from Tuesday and down 16.7% for the year. Since peaking in August 2011, gold has fallen more than 26%. The late London fixing was $1,410 an ounce, down from Tuesday's $1,433.75.

Silver was off 72.1 cents to $22.66, a 3.1% decline. It's down 25% in 2013 as well. Copper, down 2.3 cents to $3.265 a pound, is down 10.6% this year.

The precious-metal decline came as U.S. stocks headed higher on Wednesday. The Dow Jones industrials ($INDU) climbed 60 points to 15,276, its eighth gain in 11 sessions in May. The Standard & Poor's 500 Index ($INX) rose 8 points to 1,659. The Nasdaq Composite Index ($COMPX) was up nine points to 3,472.

The Dow is up 16.6% for the year, with the S&P 500 up 16.3%. Wednesday's finishes were records. The Nasdaq, whose finish was its best since Oct. 20, 2000, is up 15% this year.

The biggest culprit pushing metals prices lower has been the rising dollar. The dollar is up an astounding 17% against the Japanese yen this year, largely because the Bank of Japan and the Japanese government have deliberately pushed the yen lower to jump-start their economy.

The U.S. Dollar Index, which measures the greenback against a basket of currencies, closed at 83.96 on Wednesday, from 83.713 on Tuesday. It's up 2.6% this month and 5.1% this year.

But metals' declines also reflect European economic woes and worries about China. France is in its third recession in four years, and Eric Reguly of the Toronto Globe and Mail noted the French woes are "destroying the myth that it and Germany would be the engines that would drag the euro zone out of the economic mud."

Germany's economy is barely growing, and economies in southern Europe are basically in depression.

Gold's fall meant the two exchange-traded funds that buy gold directly were down Wednesday. The SPDR Gold Shares (GLD) ETF fell $3.18 to $134.63. The iShares Gold Trust (IAU) fell 31 cents to $13.54. Both are off more than 26% from their peaks in 2011.

The iShares Silver Trust (SLV) fell $1.07 to $21.76 and is down 26.5% since its 2011 peak.

In addition, gold mining and silver mining shares were lower. Newmont Mining (NEM) was off 94 cents to $31.57. Coeur d'Alene Mines (CDE) dropped 44 cents to $13.56. Hecla Mining dropped 7 cents to $3.10.

Freeport-McMoRan Copper & Gold (FCX) was an exception, rising 19 cents to $31.76. The shares, however, are down 7% on the year.

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May 16, 2013 9:15AM
when you hear ads on the radio to buy gold, buy silver, that's your clew to sell-sell-sell! 
May 16, 2013 9:04AM
Gold will be under $1000 by years end.
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