Silver follows gold?<<<<<<<<The gold selloff could be here now
Thursday, October 07, 2010
From Bloomberg:
Gold futures fell from a record as some investors sold the precious metal on speculation that the rally was overdone.
Gold reached an all-time high of $1,366 an ounce in New York, posting a record for the 14th time in the past month. The 14-day relative strength index for gold futures has been above 70 since Sept. 22 and reached 86 yesterday, a signal for some traders that prices are poised to fall.
"From a technical standpoint, there is no support for gold at these prices," said Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois.
Gold futures for December delivery fell $11.30, or 0.8 percent, to $1,336.40 an ounce at 11:35 a.m. on the Comex in New York. Before today, the metal was up 23 percent this year.
"Gold is way overbought," said Frank McGhee, the head dealer at Integrated Brokerage Services in Chicago. "The world has been looking for a correction, and it's going to be fast and ugly."
Bullion for immediate delivery in London rose to a record $1,364.77 before retreating.
Losses may be limited as some investors see the decline as a buying opportunity, said Adam Klopfenstein, a senior market strategist at Lind-Waldock in Chicago.
Citigroup Raises Forecast
Citigroup Inc. raised its forecast for the "short and medium" terms for gold to $1,450. The bank said stimulus measures by central banks may reduce currency values.
The dollar fell to a 15-year low versus the yen on speculation that the Federal Reserve will ease monetary policy to help boost the economy. The Bank of Japan this week lowered its main benchmark rate to "virtually zero."
"The consistent weakness in the dollar is fueling buy orders for gold," said Klopfenstein of Lind-Waldock. "People are very uncomfortable being in any currency market now."
Silver futures for December delivery fell 27.3 cents, or 1.2 percent, to $22.77 an ounce. Earlier, the price climbed to $23.53, the highest level since 1980.
