Gold was down nearly 1 percent as the dollar surged against the euro, but precious metals outpaced the dollar to the downside on a percentage basis.
In early trading gold was off $17.21 to $1,710.67 and silver was off $0.58 to $31.78, for a silver/gold ratio rising to 53.8.
It’s not just gold and silver; commodities are getting pounded all over the spectrum. Platinum is down $26.00 an ounce and is joined lower by crude oil, off more than 1.25 percent, along with palladium and copper.
The damage is not limited to commodities as European and Asian stock markets are also getting beat with the selling bat today. There’s blood in the economic waters everywhere you look this morning. Precious metals prices are part of the broader selling trend that’s crushing commodities and equities with equal gusto.
Federal Reserve Chairman Ben Bernanke is trying to stimulate the economy by lowering borrowing costs but the problem is no one is borrowing at any interest rate. More people are taking out mortgages, capitalizing on lower rates, but others are scaling down on home sizes or opting for less traditional types of housing that don’t require mortgages. Traditional types of stimulus just aren’t working anymore in the post-crash economy.
Whatever the cause, precious metals are on sale and it’s time to start paying attention for buying opportunities. Yesterday I was on the fence about buying silver; today I’m getting the checkbook warmed up. With prices dipping below $31 an ounce and the silver/gold ratio continuing to drift toward 55, it’s time to get in the game. If gold dips into the $1,600 range I may start splitting my buys and adding in more gold.
I’m not usually one to buy industrial metals like platinum and palladium, but I’m watching both closely. Platinum anywhere in the $1,500 price range is very attractive, though I prefer silver and gold as they’re more widely traded and frequently easier to exchange.
Yes, it’s sad to watch markets move lower and realize that people are losing trillions of dollars, but those same lower prices make precious metals more attractive. More proof that even dark economic clouds can have a silver lining.
Chris Poindexter, Senior Writer, National Gold Group, Inc