Gold and silver plunging again in European trade
Gold and silver prices were initially hit by continuing strength in the dollar, but the downward momentum caused by this in precious ****ls prices continued to take prices lower in morning trade.
Yesterday, gold struggled to keep its head above the $1500 level, and this morning, in Europe, trading saw it crash around $23 at the time of writing - down from around $1505 to $1482 - a fall of 1.5% in a couple of hours. Silver fared even worse. once again showing its far stronger volatility, with a fall of some 9% over a similar time period.
The initial stimulus for the plunge was dollar strength against the Euro, but although this mitigated somewhat as trading progressed, the initial fall below the $1500 mark appears to have stimulated programmed selling down to a resistance level seen at around $1480. No doubt the gold and silver bears will have another shot at extending the fall when the U.S. markets open - those who have been holding short positions in silver in particular had been looking at enormous book losses and will be taking the chance to unwind some of these positions.
There will also doubtless be ongoing comments that the gold bubble has burst flowing from those who have been pushing the viewpoint that the rising gold price is unjustified for the past ten years. However the price drivers that took gold up to over $1570 only a few days ago are all still with us. It may well be that the rapid rise to that level - and even more so silver's shoot-up to almost hit $50 - was overdone and this could be a perhaps justified correction. The bulls will say that this presents a great buying opportunity for precious ****ls investors, while the bears will continue to say prices are due for a major fall. This observer reckons the former may be the better path to follow, but there could be further falls in the meantime
The initial stimulus for the plunge was dollar strength against the Euro, but although this mitigated somewhat as trading progressed, the initial fall below the $1500 mark appears to have stimulated programmed selling down to a resistance level seen at around $1480. No doubt the gold and silver bears will have another shot at extending the fall when the U.S. markets open - those who have been holding short positions in silver in particular had been looking at enormous book losses and will be taking the chance to unwind some of these positions.
There will also doubtless be ongoing comments that the gold bubble has burst flowing from those who have been pushing the viewpoint that the rising gold price is unjustified for the past ten years. However the price drivers that took gold up to over $1570 only a few days ago are all still with us. It may well be that the rapid rise to that level - and even more so silver's shoot-up to almost hit $50 - was overdone and this could be a perhaps justified correction. The bulls will say that this presents a great buying opportunity for precious ****ls investors, while the bears will continue to say prices are due for a major fall. This observer reckons the former may be the better path to follow, but there could be further falls in the meantime
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