Peru’s small miners block highways, camp outside Congress demanding registry extension
Analyst says that there are strong competing interests between Congress and small-scale miners that could escalate.
Gold dropped to fresh nearly 3-year lows on Friday, falling $30 or over 2.4% an ounce to $1,222 in New York.
The sell-off on precious metals markets Friday came after good jobs news in the US strengthened the hand of the US Fed Federal Reserve to end its ultra-loose monetary policy before the end of the year.
Legendary US investor Jim Rogers tells Business Insider gold has further to fall and a 50% retracement from the all-time high of $1,909 an ounce intra-day in August 2011, is likely, although he is not sure when gold will hit a bottom:
I’m not selling my gold. I’m skeptical, even though I expect gold may go down even more to $1,000 to $900. A 50% correction would be $960 or whatever it is. Now 50% corrections are quite normal in markets. What’s not normal is for something to go up 12 years in a row.
So, it would be normal if gold did correct 50%. That might go some way towards shaking some of the faithful, some of the mystics. We got to shake out more people. I don’t see any signs that the faithful, they’ve been worried about what’s going on, but I don’t see any signs yet that the faithful are giving up and selling their gold. Not just verbal despair, not just people talking about despair, but people acting. Then gold prices will make a nice, firm bottom.
When the Fed starts tapering off QE – given the latest economic numbers it could be as soon as September – it will further strengthen the US dollar and tarnish gold’s status as a storer of wealth.
Gold is now firmly in the grip of the bears and if and when the Fed stops flooding markets with cheap money, it would remove a significant factor that has been keeping some sort of floor under the price.
The first QE program was announced by Bernanke in December 2008 when an ounce of gold cost $837.50.
SEE ALSO: Forget the Fed: Five more reasons the gold price has much further to fall
