Gold in 'Sell the Rally' Mode
09/14/06 - 02:26 PM EDT
Simon Constable
Shares of the exchange-traded funds that hold the metal, streetTRACKS Gold Shares(GLD Quote - Cramer on GLD - Stock Picks) and iShares Comex Gold Trust(IAU Quote - Cramer on IAU - Stock Picks), were lower recently, as was the Market Vectors Gold Miner ETF(GDX Quote - Cramer on GDX - Stock Picks), which tracks a basket of gold mining companies.
Leading the pack of miners down was Iamgold(IAG Quote - Cramer on IAG - Stock Picks), off 12.8% on news that the company would buy Cambior(CBJ Quote - Cramer on CBJ - Stock Picks) for $1.2 billion in stock. Cambior was gaining 13.5% recently. Elsewhere in precious metals, Citigroup(C Quote - Cramer on C - Stock Picks) got stung with a $500,000 fine after weak internal controls allowed a rogue trader to build up massive precious-metals positions and falsify documentation. Citigroup's Global Markets division failed to "reasonably supervise or control its precious-metals trading desk and related business activities," a New York Stock Exchange ruling released Wednesday states. Rogue trader Gail Edmonds built up a position of $373 million in December 2002, or almost 75 times her $5 million limit. In addition, the firm failed to accurately mark-to-market certain precious-metals positions and provided false customer statements, the document states. The firm admitted no guilt. In the base metals, copper dipped as well after an International Monetary Fund forecast showed slowing growth for the U.S. economy, with growth of 2.9% expected in 2007, down from 3.4% in 2006. Copper prices were recently dipping, with contracts for December delivery of the red metal closing lower by 1 cent at $3.375 pound on the Comex.
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