Gold Down 1%, Follows Sharp Drops In Commodity and Stock Markets

By: GoldCore

Markets have seen another marked increase in risk aversion with a sea of red engulfing nearly all markets including the gold market. Equity markets have fallen sharply as have most commodities. The precious metals have not been immune to the meltdown with silver down 3% and palladium and platinum plummeting 9.5% and 6% respectively. Oil has plummeted by more than 8% as have most commodities with gold one of the better performers – only being down 1%.

Today’s Cross Currency Rates – JPY, EUR and USD are stronger currencies with Commodity Currencies Under Pressure Again

Given the extent of risk aversion and the very sharp drops seen in most markets, gold’s resiliency is impressive and could indicate the worst of the recent sell off may be over. Volatility has again surged in all markets and gold has been particularly volatile today with sharp $20 rises and falls.

Gold Versus the S&P 500 Today

Uncertainty is again the key factor – financial uncertainty re the unilateral German regulatory action and economic uncertainty due to the poor US economic figures – and this is leading to risk aversion. The 1000 point inter day drop in the Dow Jones last week, while gold remained robust, is fresh in traders memory and may be adding to risk aversion.

This update can be found on the GoldCore blog here.

Mark O'Byrne
Director

WINNERS MoneyMate and Investor Magazine Financial Analysts 2006

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