The grimmest commodity market closing tally in almost two years was recorded yesterday afternoon in New York. Awash in a sea of red, the price boards showed a $43.40 drop in gold, a 12% collapse in silver, $54 off platinum and $34 off palladium.
The focus in the marketplace remains almost entirely concentrated on silver and the silver bubble's developing story. The CME hiked the margin requirements for silver speculation for the third time in a week.
Gold and silver closed higher yesterday after Standard & Poor's, somewhat belatedly, cut its outlook for the US from stable to negative. While the move seemed to surprise some, many market participants have been warning that this was inevitable.
Investors who don't think gold is a bubble but fear they've missed the boat need to look at the short- and long-term factors supporting gold at these historically high price levels. In the near-term, gold prices are buoyed by weakness in the US dollar.
Precious metals trading got off to a flying start on Monday, with gold prices rallying by $11.10 per troy ounce, and they were initially quoted at $1,443.90 on the bid side of spot after having touched early highs at a new, $1,445.90 per ounce record.
On-going and spreading societal unrest in North Africa and the Middle East offered support to gold prices on Thursday, as did a weaker US dollar overnight. The greenback however recovered a bit following the release of CPI and jobless claims data.
The ongoing decline in the precious metals complex continued overnight as a stronger dollar and a slightly lower euro coupled with losses in the Nikkei index conspired to keep sellers active and buyers less so.