Wholesale prices to buy gold using US dollars or British pounds fell Thursday morning to trade just 1% below their seven-month highs of the last week. Commodity prices dropped once again with Asian and European equities.
Spot gold prices fell solidly under the $1,800 pivot point this morning and remained very near the $1,780 level for most of the remainder of the trading day. The decline came after of coordinated action from the ECB and other central banks.
Gold prices dipped once again overnight after trying to mount an assault on the mid-$1,800s on Tuesday. The yellow metal was not alone in losing value; silver and the noble metals plus a host of other commodities from crude oil to copper also sold off.
Gold has risen to new record highs in pounds and euros as concerns about contagion in the eurozone and stagflation in the UK deepen. The euro has fallen sharply in international markets and is down 1.5% against gold so far this morning.
The October rout of the stock market and the bailout plan reminded me of a line in the movie "Armageddon." In the movie, Earth was being threatened by a killer meteor, and NASA was trying to determine how to destroy the rock before it hit. One U.S. military general suggested shooting up a bunch of nuclear weapons to destroy the meteor. But a (of course, brilliant) physicist responded, and I paraphrase: "You could shoot up as many weapons as you wanted but they would just bounce off and the meteor would keep on smiling."