Loading ...Why Are Metal Prices Falling?
by BWK ~ March 20, 2008
Why are metal prices falling? Here are some reasons…….
After a great run in the first 10 weeks of 2008, large funds are taking profits toward the end of the First Quarter.
Some funds are liquidating due to margin calls.
When gold hit passed $1,000 and moved up towards $1,030, there was a serious drop in physical demand, particularly from the jewelry users. (Demand from India just plain fell off a cliff.) But in the current range of low-$900s, jewelry demand has reappeared.
The gold & silver markets will probably fall for another day, and stabilize over the Easter weekend. Gold could drop below $900 today.
Silver took a hard knock, going from near $20.50 to well under $17.50. Ouch.
More considerations…
The pullback is broad, affecting gold, silver, platinum, palladium.
The price for Cobalt, which has risen steadily to a 30-year high, has plateaued and appears to be declining slightly.
Electricity supplies have started to rebalance in South Africa. Mines are getting 95% of previous power allocations, so output is returning to expectations.
Political unrest in Tibet may be a harbinger of more problems than appear to meet the eye in the “China story.”
Regarding China… Remember the “unsinkable” ship Titanic? The steel was brittle. When it hit an iceberg it sank in less than three hours.
Until We Meet Again…
Byron King
Note: Byron King is a frequent contributor to the free e-letter Whiskey & Gunpowder. To receive daily insights into energy, oil, commodities and other natural resources sign up here!
Additional Resources
The U.S. Strategic Stockpile Is Gone…Now What?
The Power is Still Off in South Africa - the Effects on Mining…
March 21st, 2008 at 11:02 am
I agree with this reason for sure: “Some funds are liquidating due to margin calls.” It’s always the money guys, always!
When you consider that silver, platinum, palladium & other metals get used up, why all this emphasis on Gold, where nearly every ounce mined is still in circulation or saved in some vault? It’s an arcane metal if you ask me, when it tops out, NOTHING FALLS FASTER! (Well maybe Bear Stearns w/b an exception, heh-heh!)
Try buying food or filling up your gas tank with a bag of gold dust. These liberals keep harping on the dollar, well what paper money does the world prefer, the Euro? Europe has nearly 10% UNEMPLOYED, their welfare system dwarfs ours per capita, & they’ve never out produced us in the modern era, have they?
The buck has either bottomed, or will soon, mark my words!
Thanks for the invite here guys, it s/b interesting.