India’s record gold import said to be due to calculation error
Officials double-counted gold shipments in warehouses following a change in methodology in July, Bloomberg sources say.
Gold for December delivery had shed $40 or more than 2% by lunchtime coming close to breaching the $1,600/oz level in New York before before regaining some ground to trade at $1,618 an ounce by early afternoon.
Traders said the metal is likely to remain a “dead trade” until it can resume its role as a fear barometer and is able to rally in face of equities weakness and that a “solid downtrend” has now been established. Some analysts are saying gold’s precipitous $300 drop in September represented a fundamental market shift and that gold’s fall despite market volatility and economic uncertainty means the metal has lost its safe haven status and is being treated like any other commodity.
MarketWatch quotes Adam Klopfenstein, senior market strategist at MF Global as saying that if gold can’t regain its safe-haven status, “it will be treated as a physical commodity with few chances for seeing significant upside in the next months.”
Reuters quotes Hou Xinqiang, an analyst at Jinrui Futures in Shenzhen, China: “We are likely to see more downside in commodities in the near term with the gloomy macroeconomic backdrop, but gold may hold up relatively well due to its safe-haven nature even though its commodity identity has been more pronounced lately.”
Earlier this month MINING.com argued gold’s precipitous $300 drop in September represents a fundamental market shift and that gold has lost its safe haven status, quoting trading floor executive-turned-lecturer (University of Boston School of Management) Mark Williams: “Global stock markets are volatile, central banks have not regained credibility, inflation is still a concern, and trust in the markets has not been restored. Yet gold continues to fall…”
Other precious metals were also hit on Thursday: December silver briefly went below the psychologically important $30/oz level, the first time since February. The precious metal hit an intra-day high of $49.22 at the end of April. January platinum also lost vital support to trade below $1,500/oz from a high above $1,900 only two months ago.
3 Comments
Jrs0389
Nonsense, this manipulation by the federal reserve. Has been going on for many years
David R. (Canada)
Famous last words by Frik Els.
We’ll wait and see what happens when the Euro finally collapses.
Craftyfellow
I believe they want to US Dollar to be the safe haven… That isn’t happening!