Gold and silver crashing: ouch!

Gold and silver move up to incredible highs, and then today someone suddenly let the air out of the ballon, especially the silver balloon. Ouch!

I'm sorry that I don't have any deep insights. According to MarketWatch, it's just profit taking which began in silver and then spread to gold:

"This originated in the silver pits," said Jon Nadler, an investment products analyst at bullion dealers Kitco.com.

There's "major profit-taking by funds that had loaded up ... in anticipation of the silver ETF [exchange-traded fund]," he said, and since the ETF still has not seen the light of day, "funds decided not to be pigs and took some money off the table."

This in turn started a pullback in gold, he explained. Traders are "much more inclined to take profits in the metal that had already had the largest percentage run up to the moment," he said.

Let's hope that the bloodletting only lasts one day.

Comments

[madphycom]

I dont know - I actually DO believe the theory that there is some government interference in these markets - especially true for Gold.

I obviously dont have much "evidence" to support this; but it rings kind of true to what governments usually do.

Of course - in the end all this meddling is likely to do nothing but increase the odds of some economic ill effect, which ironically the Fed will have to find some way to diminish the effects of - which usually means printing some money - which usually means a rise in gold.

We'll likely never see 500 bucks for Gold ever again; that is unless we also see 20 bucks a barrel oil too after a huge and sustained campaign to lop off about 1000 zeros from the back of our bank notes.

I might be wrong about this, but that's my feeling.

Nice blog! Will give you a click or two, if you would do it on mine.

[Josh]

Don't worry, it'll come back.

I remember almost cashing in on that peak, almost a year ago. Then I was poor for a whole summer I couldn't buy any while silver was $10. It's coming back up, or so it seems.