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

'Perfect Storm' Sends Gold Bugs Scurrying (Update 5)

These easing policies, combined with economic uncertainties in Europe, have led many analysts and investors to believe buying potential remains in play for gold.

Reports emerged last week that Cyprus is selling its gold reserves, which has led many investors to wonder if struggling nations like Portugal and Spain will also begin to liquidate their gold holdings in exchange for more capital.

Chinese gross domestic product grew 7.7% in the first quarter of 2013. The figure trailed economists' expectations of 8% growth, according to a Reuters poll, and receded from the 7.9% growth the country saw in the fourth quarter of 2013.

Silver prices for May delivery sank $2.97 to $23.36 an ounce, while the U.S. dollar index was gaining 0.21% to $82.30.

"One of the problems I think . . . is the fact that gold investment for many has almost become religious; by that I mean there was nothing really that would call for lower gold prices, only higher," Ole Hansen, head of commodities strategy at Saxo Bank, in a phone interview from Copenhagen. "A lot of people have been clinging onto this investment throughout the last six months . . . but you could easily find arguments convincing yourself you are on the right idea."

Ole said his projection for 2013 has been gold at $1,200 an ounce.

Gold dropped more than $60 an ounce on Friday as the precious metal crashed through multiple levels of technical support, which signaled a shift to a bear market. But electronic trading in the late hours of Friday signaled the gold selloff had not reached a bottom, Phil Streible, a senior commodities broker at RJO Futures, said in an interview.

"At the end of Friday's electronic session the market was about $40 lower [than the settlement price], so these people would have to . . . meet the losses," Streible said. "So over the weekend you saw a lot of traders reassessing their positions, and not only individual traders but these are also large funds and hedge funds as well that are forced to liquidate."

Liquidation pressure and long-only funds on Monday -- similar to Friday's trading action -- were continuing to sell off their positions.
2 of 3

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
ABX $19.37 0.00%
GDXJ $38.52 0.00%
GLD $123.65 0.00%
IAU $12.48 0.00%
SGOL $126.01 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs