Posted on 08/26/2011 4:05:36 PM PDT by Atlas Sneezed
After soaring to nearly $1900/oz. and dropping to near $1700/oz. in the past week, gold recovered to close the week at $1829. This means that the recent "correction" has been two-thirds undone in the recent rise.
Gold's close exceeds the new record set just 6 trading days ago.
Platinum closed at the same price, and the parity in pricing is a rarity that attracts some gold investors to convert some gold holdings into platinum, with the expectation that platinum will return to its traditional position as the more expensive metal, at time by more than a factor of two.
I thought the correction was actually the elites trying to dampen safe flight to gold by the 27 % increase in margin requirements to trade gold.
Looks like they were successful , for 2 days.
the margin manipulation did nothing to correct the underlying reasons driving investors to gold
Margin works both ways since every futures contract has a buyer and a seller, now the shorts must pony up more dough.
They hit silver with five margin hikes in May. They’re not done with gold yet.
How effective they’ll be is another matter.
I don’t think the recent gyration qualifies as a “correction.” When a price rises that fast a lot of investors feel it must crash back and they go short. When there is a lot of short in the system it affects others who then sell to avoid the fall and it becomes a self-fulfilling prophecy. If the stock or commodity is not, in fact, “oversold” but the price reflects real conditions then the price will go right back up so it would not be a “correction.” I did not sell and I did not worry that I might be caught in some sort of “collapse” of gold. The western world, and maybe China, too, are involved in economic suicide and people everywhere are trying to protect what assets they have. Gold has been the refuge for far longer than Capitalism or socialism and stupid and/or power-mad politicians have existed.
The price dip was a sucker punch to wash out the little guys with stop loss points on their ETF and mining stocks. Now that the big pigs have loaded up on the dip priced gold, the upward rise continues. I think all who want safety should have some gold and recommend buying at the present price a bit and a lot if another dip comes.
Does the Peoples Bank of China buy on margin?
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