Tag: Gold

Investors flee to gold

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Stock-shocked investors are fleeing to gold, pushing the precious metal to new heights.

Gold reached a new intraday high of $1,782.50 per ounce in electronic trading before backing down to $1,746.20. That’s an increase of $33, or about 2%, compared to its Monday close. On Monday, gold broke $1,700 for the first time.

The current flight to gold has been by a nasty stock market plunge. On Monday, the Dow Jones industrial average plummeted 624 points, or about 5.5%, and the Nasdaq and S&P 500 dropped nearly 7%. It was the worst day on Wall Street since the 2008 fiscal crisis.

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Gold Hits $1,800

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As gold topped a record $1800 on Wednesday, traders that are long gold [GCCV1 1751.50 -32.80 (-1.84%) ] began to get nervous that they were behind a trade that may not have any potential new buyers left. After all, a trade only keeps working if you can find someone else who wants that particularly security or commodity at a higher price.

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Gold Weekly Fundamental Analysis for June 27-July 01, 2011

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Gold ended last week with heavy losses after the metal failed to sustain the gains versus the strong dollar and amid a heavy selloff on commodities.
This week, the downside pressures on gold might still be evident this week as the metal broke through critical support levels and accordingly the liquidations might still be evident especially amid heavy volatility in the market

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Why Are Gold Stocks Falling?

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Gold stocks normally amplify the gains from gold. If gold goes up 10%, then a good gold stock should go up 20%. So traders look for this ‘leverage’ to the gold price in gold stocks.

That was until ETFs became such a big force on the market.

Now traders can invest directly in gold ETFs with borrowed money to get the same effect. It saves having to do all that annoying research into a gold company.

So with all that money heading for the ETFs – instead of the stocks – the gold price and gold stocks are diverging.

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Gold Approached $1,570 an Ounce!

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Gold approached $1,570 an ounce, extending a rally to a record, on bets that the dollar will extend a slump, enhancing the allure of the metal as a store of value. Silver posted for the biggest monthly gain in 28 years.
“Silver’s run is related to the rise in gold,” said Michael Cuggino, who helps manage about $12 billion at Permanent Portfolio Funds in San Francisco. “There’s a lot of speculation in silver. Anytime you’ve had a run like silver, you’re going to get a correction.”

Gold has climbed 33 percent in the past year, and silver has more than doubled.

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