Gold down over 1 percent, in bear market territory
Gold and silver bars are pictured at the Austrian Gold and Silver Separating Plant 'Oegussa' in Vienna August 26, 2011.
Credit: Reuters/Lisi Niesner
NEW YORK/LONDON |
NEW YORK/LONDON (Reuters) - Gold fell more than 1 percent on Thursday to its lowest level in nearly six months, as year-end liquidation by funds and early losses to the euro on debt fears pushed bullion into bear market territory.
The precious metal, which has recently moved in tandem with riskier assets, broke ranks with equities which rebounded after the previous day's decline.
Technical selling and the need for hedge funds to raise cash to meet client redemption at year-end triggered gold's decline which was exacerbated by thin holiday volume.
"It wouldn't surprise me to see that there is some fund selling of gold because of additional liquidation at the end of the year," said Adrian Day, president at Adrian Day Asset Management, which has $165 million in assets.
"The main problem going forward is the continuing strength of the dollar because no other major currency has much validity at the moment," Day said.
Spot gold fell 1.2 percent to $1,536.70 an ounce by 12:13 p.m. EST (1713 GMT). It has earlier hit a low of $1,521.94, the weakest since July 6.
The metal has now lost more than 20 percent of its value from its intraday record high of $1,920.30 an ounce set on September 6, the common definition of a bear market.
U.S. gold February futures dropped $25.60 to $1,538.50.
Silver fell 0.3 percent to $26.96 an ounce, sharply off its session low of $26.19, which came within striking distance to a 13-month low.
Gold prices have recently been trading in lockstep with the euro, which fell below $1.29 for the first time in 15 months as fear that Europe's debt crisis could worsen next year. <USD/>
The euro later recouped losses and traded flat against the dollar.
Bullion also ignored a near 1 percent rebound in the S&P 500 index on better-than-expected U.S. pending home sales data. .N
(Additional reporting by Silvia Antonioli in London; editing by William Hardy and Andrea Evans)
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Its hard to believe thant the regulators are so oblivious to this MANIPULATION. You know………… It’s like they don’t want to know.
They chose the week between Christmas & New years to destroy the foundation of the metals market. Well done. I hope you burn in Hell for this.
Italy borrowing money to pay for past debts won’t help when it’s currently bloated spending exceeds what is made through taxes– expect serious cuts, or bankruptcy. Gold prices reflect a bet on ‘fiscal discipline’ and you are writing that the opposite is needed… Can you see the irony? Low gold prices means currency stability.
What the publication misses here is that while the US stock market is barely at break even, gold is well above where it started 2011, once again being the only true safe haven and the safest form of risk aversion.
Yet, the mainstream talks about gold as if it had some kind of blow of top. It never did. Gold is steady and only the central banks and their minions in the TBTF zombie banks they keep afloat by lending ever more money to them don’t want you to think gold is a viable alternative to their debt infested currencies and like every act of dying empire and the acts of cruel souls seeking to hold to a system debt slavery and increasingly intrusive government under the guise of a never ending war on “terror” they seek to dissuade “We the People” from believing in honest money and in true competition and true capitalism and instead subcribe to their corporate welfare system for the rich and by the rich.
Gold and silver are honest money and have through the ages been the bi-metal standard for money.
Gold has formidable support at $1550, $1525 and especially at $1500. In my opinion, entering at these levels ensures another profitable year in gold as the balance sheets of the central banks increase towards infinity and solvency of much of the global sovereign debt is increasingly questionable at best.
I like what the famed Elliot Wave theorist has to say on the subject of the dollar and I’d add the euro to it easily as well:…
“…Let’s attempt to define what gives the dollar objective value. As we will see in the next section, the dollar is “backed” primarily by government bonds, which are promises to pay dollars. So today, the dollar is a promise backed by a promise to pay an identical promise. What is the nature of each promise? If the Treasury will not give you anything tangible for your dollar, then the dollar is a promise to pay nothing. The Treasury should have no trouble keeping this promise….”
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