U.S.stocks plunged Friday on two troubling economic developments: oil prices
that surged more than $6 a barrel and a jump in unemployment that was much
larger than the market anticipated. The Dow Jones industrial average gave up
more than 250 points. Gold surged over $17 dollars an ounce above $895 and
silver continued its upward flight above $17 an ounce. It is fair to ask what
the heck is going on here and who has some of the answers?
Source: www.GoldSilver.com
Of silver, the Hightower Report wrote: “With the silver market also
getting its share of private bearish price predictions during the trade Thursday
it was very impressive to see the market generally favor the upside. In fact,
with gold favoring negative ground for most of the session, some of the bull
contingent had to be extremely happy with the action today.
"Perhaps the silver market was garnering some support from the reversal in
the Dollar and perhaps the silver market was actually lifted by the up beat
macro economic developments from the US. In fact, with favorable initial and
ongoing claims, positive May retail sales figures and a soaring equity market,
perhaps the silver market was being lifted by improved physical demand
expectations.”
The people at Casey Research wrote this morning,
"That gold lagged the rest of the market was a foregone conclusion to those who
believe it will follow the dollar and who shrugged off yesterday’s weakness in
the buck."
“It's [Ben] Bernanke” who drove down gold, said Leonard
Kaplan, president of Prospector Asset Management in Evanston, Illinois. “He has
basically said the other day that interest rates are going up. If the dollar is
going higher, gold is going lower.”
Period? Uh uh, says James Moore, of
TheBullionDesk.com, who wrote that “as inflation becomes an increasing
issue globally and credit market issues resurface, investors are likely to
increase their demand for safe-haven assets such as gold.”
But today the price of oil and an obviously sick US economy caused gold to
reverse into a nice upward move approaching 2% so far. This undermined the US
dollar and has added many questions about the depth of the current US
recession.
"Oil's advance unnerved a market already anxious about consumers' willingness
to spend; the higher that energy costs go, the more difficult it will become for
consumers to justify spending on things that aren't necessities", opined the
Associated Press..
