By Barry Stuppler – MintStateGold.com
Similar to what happened in the United States during our financial crisis in October of 2008, yesterday we saw traders, fearing a European liquidity crunch, sell equities, bonds, metals, energy, currencies and commodities. Gold dropped 2.40 % on Thursday; the fourth consecutive down day, after ratings agency Fitch warned that U.S. banks are dangerously exposed to contagion from the spreading Eurozone sovereign debt crisis. Yesterday’s gold sell off reached $1,709 per ounce at one point before rallying back up to close at $1,720.90. At 11am PDT today, Gold is up $2.40, trading at $1,723.30 per ounce on overnight bargain buying in Asia. U.S. trading today is considered light.
On Thursday, silver prices extended losses for a second straight day of trading . Silver lost 5.91%, down $1.99, to $31.81 per ounce, more than double the loss for gold which dropped 2.40%. Both silver and gold continue to trade counter to their traditional roles as safe haven assets in the wake of ongoing uncertainty in Europe. Adding to the volatility over the past few trading sessions was a stronger U.S. dollar, putting downward pressure on prices. However, again today precious metals have defied the traditional metrics and have fallen dramatically with a weaker greenback. Many analysts agree that the prices of silver and gold are both trading below their fundamentals, which could provide some support going forward. At 11am PDT, Silver is trading at $32.51, up $0.70 per ounce on light trading.