Gold and silver sure aren't behaving like safe havens.
The precious metals are typically seen as safe stores of value in hard times -- inflation, deflation, depression
, war, whatever
-- but in recent weeks have fallen whenever
stocks have fallen, suggesting they aren't such safe havens any more.
And then you have days like today, where gold and silver are surging along with the stock market and other risky assets.
Gold at least check was up 2.3% to $1673 an ounce, and silver was up 4.1% to more than $32 an ounce.
Some of this may have something to do with the direction of the dollar -- when risky assets are rising lately
, the dollar tends to be suffering
, as is the case today, with the euro up 2.3% against the dollar to nearly $1.37.
But that doesn't explain most of these moves. Instead, as with crude oil, this seems to be mainly
about speculators jumping in.
Cue up Commerzbank analysts again:
Gold has increased to USD 1,650 per troy ounce this morning and is currently moving in line with the commodity
markets. This unusual
behaviour shows that speculativefinancial
investors in the futures market are largely responsible
for the current movement
s in the gold price.
CFTC data on market positioning are correspondingly important. The week to 4 October also saw a reduction
of 1.8 thousand in speculative
net long positions for gold to 120,689 contracts - the lowest level since May 2009. This was also the sixth decline in net long positions in the last seven weeks.
The scaling back of positions has slowed considerably
compared to the previous
two weeks. This could indicate that the correction
in the futures market is largely completed and that pressure
on prices from this side is easing.
However, the level of net long positions is still significantly higher than after the correction
of autumn 2008. Consequently, there is still a certain amount
, particularly since net long positions can be assumed to have been increased again in the last few days in response
to the upwardmovement
in the gold price.
a risk of another downwardmovement
in the gold price if the equity
markets come under renewed pressure