So prices are down again...

Discussion in 'General Precious Metals Discussion' started by Shaddam IV, Jun 3, 2011.

  1. Shaddam IV

    Shaddam IV Well-Known Member Silver Stacker

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    As bad economic news surfaces with regards Greece, the US economy and China's manufacturing forecast among other things, gold and silver prices drop. Is there a connection or is it a coincidence? During the GFC the prices dropped a lot too, and then climbed to new heights. In the event of another financial shock I assume that for a while at least the bottom will drop out of metals again... What strategy to take in that situation? I assume that the thing to do is to hold on and wait for currency devaluation to follow? I would like to know what people's opinions and guesses are as to what will happen during and after to physical metal values if another big shock occurs. I guess it depends a lot on whether the country that you happen to be in goes into inflation or deflation?
     
    Shaddam IV, Jun 3, 2011
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  2. Naphthalene Man

    Naphthalene Man Active Member Silver Stacker

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    I don't get why the price would drop on bad news. Do people go 'Sh*t bad news - sell precious metals.... hang on a sec... buy precious metals."

    I understand silver with the industrial component but gold? Anyone please explain to this simpleton?
     
    Naphthalene Man, Jun 3, 2011
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  3. fishball

    fishball New Member Silver Stacker

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    Since when has gold dropped? o_O
     
    fishball, Jun 3, 2011
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  4. Smoothcriminal

    Smoothcriminal New Member Silver Stacker

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    I suspect a lot of larger gold investors are also share investors, and IMO there was possibly some margin calls this week as shares tanked and they sold gold to fund the gap. Same thing happened in the GFC big players with their fingers in a lot of pies got burned badly in the share pie and pulled the cool soothing nectar of the PM pie out to treat the burns.
     
    Smoothcriminal, Jun 3, 2011
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  5. RhythmDoctor

    RhythmDoctor Active Member

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    erm... lost nearly $20 US in the last month?

    Nothing too much to worry about though, load up if anything! :D
     
    RhythmDoctor, Jun 3, 2011
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  6. fishball

    fishball New Member Silver Stacker

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    Only because USD has become 'slightly stronger' due to bad news of Euro, Yen and just about everywhere else.

    The 3 biggest currencies in the world are Yen, Euro and USD. Big players such as trust funds who hold currency baskets tend to go for the least risky one which currently they seem to think is USD. These big players move the demand for USD upwards and creates the impression that USD is a worthwhile and safe investment.

    Whether or not USD is actually worthwhile is another discussion.

    So in reality Gold hasn't really dropped, USD has just 'strengthened' (ugh).
     
    fishball, Jun 3, 2011
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