This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Gold Prices Slaughtered by Dollar

NEW YORK ( TheStreet ) -- Gold prices tanked Friday as the U.S. dollar outshined the metal as the safe haven of choice.

Gold for December delivery plummeted $101.90 to settle at $1,639.80 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,757.90 and as low as $1,631.70, while the spot gold price was down $89, according to Kitco's gold index.

Silver prices torpedoed down $6.47 to close at $30.10 an ounce. The U.S. dollar index was down slightly at $78.33. Silver was getting hammered hard as were all industrial metals on global double-dip recession fears, although in after hours trading silver was climbing into the green.

"It's an absolute tantrum by most markets," said Jon Nadler, senior analyst at, in describing the carnage in commodities.

Gold prices tanked almost 10% in two days as investors rushed into cash, pushing the U.S. dollar index to a seven-month high. The dollar rally was pausing Friday, but the strong currency was still weighing on the metal.

The two typically move inversely, and a strong dollar makes the dollar-backed commodity more expensive to buy in other currencies sidelining buyers.

Traders also sold gold to raise cash to cover losses in stocks, and portfolio managers are rebalancing their books headed into the end of the third quarter -- which means booking profits in gold. Both technical factors pressured prices.

"Liquidation selling in gold and silver seems to be outweighing its safe-haven buying," said James Moore, research analyst at, "but we would expect that to return before too long."

Nadler is a bit more skeptical, saying it's possible gold prices make one more push higher on safe-haven buying as global stocks enter a bear market and investors panic over a global slowdown and no resolution to the European debt crisis.

"It's possible that we have one more push to the upside possibly above the previous highs in the low $1,900s but that has to come about quickly," Nadler said.

If gold prices can't hold the $1,700 level, then Nadler foresees a correction to the mid-$1,600 level or even as deep as $1,480-$1,500 an ounce.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AEM $45.70 -2.30%
AUY $4.55 -3.40%
EGO $3.96 -5.00%
KGC $5.42 -4.00%
AAPL $95.18 1.64%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs