Gold Prices Drop 6% in Sept, Silver Down 12% as Dollar Jumps, Bugs Face "Boredom or Despair" Says Gartman
Tuesday, 9/30/2014 14:13
GOLD PRICES fell hard against the Dollar mid-morning Tuesday in London, sinking to fresh 2014 lows as the US currency rose again.
The Dollar extended its rise vs. the Euro to new two-year highs after last month's Eurozone inflation was reported at just 0.3% annually across the 18-nation currency union.
Recording their lowest London Fix since New Year's Eve at $1210 per ounce, Dollar gold prices stood 6.3% down for September – the sharpest 1-month drop since June 2013's fall of 14%.
Silver prices followed gold lower in Dollar, hitting their lowest London midday price (formerly known as the Silver Fix) since 26 March 2010 at $17.11 per ounce for a 1-month drop of 12.1%.
"Until such time as the 'Gold Bugs' finally give up and exit their trades, the next bull market in gold will not begin," says Dennis Gartman, editor of eponymous tip-sheet the Gartman Letter.
"The market wants to take out the true-believers before gold goes higher. It shall be either boredom or despair that shall take the 'Bugs' out. We hope for the former; we fear the latter."
The surging Dollar today left gold prices for UK investors at only 3-session lows above £745 per ounce in London trade.
Euro gold prices were little changed on the day, less than 5% below the last 12 months' high.
Looking at Dollar gold prices, Bloomberg quotes Chinese brokerage Citics Futures' analyst Zhu Runyu, "The divergence in monetary policies between the Fed and other central banks will further push up the Dollar and weigh on gold.
"As geopolitical tensions fade, gold has also lost a key price support this year."
Over in Asia – where
Shanghai gold trading was the quietest in three weeks as the Golden Week holidays began – the Hang Seng equity index fell hard for the fifth day running on Tuesday as Hong Kong's pro-democracy protests continued.
The Hang Seng closed September almost 10% below the 6-year high hit at the start of this month.
Even with riot police pulling back and the protests remained peaceful overnight, Chow Tai Fook – the world's largest jewelry retail chain – said today it's keeping some 20 stores in the city closed.
Global equities meantime showed their worst quarter since the Euro debt crisis peaked in late 2012, and crude oil meantime neared its worst 1-month drop since 2012 on what some analysts called "a glut of supply".
The fall in Europe's Brent contracts, reckons Commerzbank's commodities team, was "largely speculatively driven".
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