Randolph Kinney
Elite Member
- Joined
- Apr 7, 2005
- Professional Status
- Retired Appraiser
- State
- North Carolina
Liquidity crunch? Sell anything to raise needed cash
http://www.marketwatch.com/news/story/gold-extends-losing-streak-end/story.aspx?guid=%7B95863C4C%2D03AF%2D42A9%2DBBF0%2D3F230A8E9A50%7D
http://www.marketwatch.com/news/story/gold-extends-losing-streak-end/story.aspx?guid=%7B95863C4C%2D03AF%2D42A9%2DBBF0%2D3F230A8E9A50%7D
SAN FRANCISCO (MarketWatch) -- Gold futures fell Wednesday to close at the lowest level in more than a week, tracking losses on Asian and European stock markets as fears over increasing mortgage defaults escalated and investors sold commodities in pursuit of liquidity.
The benchmark contract has now fallen over the last four sessions, tallying a loss of $13 an ounce, or 2%, for the period.
"Once again, gold remains tied to severe sell-offs in the general markets," said Peter Spina, chief investment strategist at GoldSeek.com, in e-mailed comments.
All the same, gold faces a "short-term dilemma," Spina said. "As we see relentless selling in the general markets, a move to raise cash occurs and gold is not immune."
"Gold has come under renewed external pressures, as a string of negative news keeps global investors and their assets in search of a quick escape route," said Jon Nadler, an analyst at Kitco Bullion Dealers.
In a research note, James Moore, analyst at TheBullionDesk.com, said continued risk reduction and the necessity to generate cash for margin calls will likely cause gold and other commodity markets to sell off further.
'Three weeks ago, it was the yen carry-trade going into full reverse that made the headlines and ostensibly dragged gold down with it. Now comes the crumbling U.S. subprime lending market and the huge shadow it is throwing on the shares of financials and home builders.'
— Jon Nadler, Kitco Bullion Dealers