Through The Storm We Reach The Shore
(Kitco News)- I feel like I emerged from thetrenches, bruised, battered but still resilient - gold and silver both took ahard fall this week. We were waiting for energy to enter the space again, butthis was definitely more than anyone foresaw. Gold prices fell 2.5% this week,marking the biggest weekly fall in more than a year as prices hit 1.5-yearlows. Silver also felt the pain, down 4% this week - the biggest weekly losssince February.
As analyst Bubba Horwitz said this week, “the metals markets are attempting tostop the bleeding and find a bottom. It appears that the sellers are runningout of steam.”
Main Street may be more bearish than ever on the direction of gold prices in the next week, while WallStreet leans bullish, based on the weekly Kitco News gold survey. Over theyears, Main Street has tended to be mostly bullish on the metal. However,retail investors have called gold to be lower in three of the last four weeks,and perhaps never by as large of a percentage as this week.
We have some great coverage for you this week. Make sure to read Allen Sykora’s report on silverminers and whether they can withstand the pain of this week. “Someprimary silver producers are no doubt feeling pain these days after thesell-off in silver prices so far this year, but don’t look for major supplycutbacks any time soon,” he writes.
This week’s guests on our show seemto think that gold price’s misfortunes should not last forever; investors areseeing gold bottom out at current levels.
Gerald Celente,publisher of The Trends Journal, said that gold is currently at a bottom, witharound $30 of further downside potential.
He noted that catalysts for a turnaround could be heightened geopoliticalturmoil in the Middle East, such as tensions with Iran, rather than economicfactors.
On Turkey, this week’s biggest geopolitical news, chaos in the country mightonly be mitigated by an unlikely asset: gold.
Steve Hanke,professor of applied economics at Johns Hopkins University, said that acurrency board that anchors the Turkish lira to another reserve currency, likegold, is Turkey’s most promising option at stabilizing a rapidly depreciatingcurrency.
“Under a currency board arrangement that was gold-based, the lira would tradeat a fixed exchange rate to gold, be freely convertible, and it would be fullybacked 100% by gold. So, the lira would literally be as as good as gold,” Hanketold Kitco News.
See you next week!
By Daniela CamboneFor Kitco News
Follow @DanielaCambone
dcambone@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.