All precious metals were down when American’s were asleep today. Gold dropped more than $17 at one point, silver losing .60 early and palladium retracting more than $22. All during the early am hours when the asian markets opened. It is a must to point out that the dollar was rallying as well during this same time frame.
These losses would return quickly as soon as the American New York market opened and the American retail buyer came in to buy the metal that the asian countries were selling. This brought the prices right back to their levels and caused them to go even higher. The dollar ended the day sliding down as well.
From the activities today, it appears that the asian markets sold a significant amount of precious metals during early trading hours, enough to cause the price drops that are mentioned above. It also appears that the American market came in to save the day and acted as they have been programmed to…. buy on every dip!
Just about every asian country added to their stake in US debt today….
The question everyone should be asking is why?
Either no one realizes that Europe is worse off than America, or they just don’t want to admit it. Once people open their eyes and allow themselves to accept this truth, we could very well see a sell off in the Euro. With strikes in France, Ireland bankrupt, Greece being Greece, and too many other issues to list, any hint of a Euro break up can cause a huge rally in the dollar and bring it back to the safe haven of the world in spite of QE 2 being discussed daily.
If this happens, this could very well cause a sharper correction than anyone expected in the precious metals market.
No one thinks this will happen cause of the “dire straits” that the American economy is in. But, keep in mind, the collapse of the dollar is not in the best interest for anyone world wide. So even though countries are keeping their currency values low in comparison to the dollar, they will not allow the dollar to get too much lower than it already has. If the dollar does get any lower, it may effect economies around the globe as America is a giant in international imports.
If the world decided they no longer want the almighty dollar, gold will step in once again as a benchmark for true value.