Saturday, September 24, 2011

High-flying gold crashes in record $100 freefall - 23rd Sept 2011

Gold crashed more than $100 on Friday, as a slide turned into a free fall, with weeks of volatility, renewed strength in the dollar and talk of hedge fund liquidation wrecking its safe-haven status.

The sell-off came even after relative calm was restored to the stock and oil markets following Thursday's losses. Bonds also dived with gold and silver as investors took profit on a near week-long rally in U.S. Treasuries.

Widespread talk of possible selling by big hedge funds covering losses in other markets set off one of the biggest routs on record in the precious metals group.

The CME Group, which oversees trading in U.S. gold and silver futures, responded by raising margins, or deposits, required on trades of the two precious metals as well as copper. The move would further squeeze the most optimistic investors in gold, who are trying to hold onto long positions or bets on higher prices.

"We're making new lows and the bull case for gold is on pause for the near term," said Adam Klopfenstein, senior market strategist for precious metals at MF Global in Chicago. Read More