Gold Plummets $96 an Ounce in One Day!

August 24, 2011 – Gold Plummets $96 in One Day: Gold prices fell sharply Wednesday after a surprisingly strong report on new orders for durable goods ruined hopes of more easing from the Federal Reserve. Gold futures for December delivery fell $95.80, or 5.1%, to settle at $1,765.50 an ounce – in one day!

The retreat comes after a powerful rally in the gold market sent prices skyrocketing above $1,900 an ounce earlier this week. Gold started the year just above $1,400 an ounce.

Investors have been flocking to the precious metal for weeks as global economic and debt concerns have weighed on riskier assets such as stocks. Gold is seen as a safe-haven asset and prices tend to spike when investors get nervous.

More recently, the rally has been driven by expectations that the Federal Reserve would signal additional steps to support the economy

The Commerce Department said orders for durable goods rose 4% in July, after slipping 1.3% the previous month. Economists were looking for just a 1.9% rise in orders. A strong durable goods number makes a Fed move less likely. Such a large increase in durable goods orders would normally suggest that consumers and businesses are feeling more confident. However, the jump last month was driven largely by orders for aircraft and vehicles.

Gold prices were ready for a pullback after rocketing higher for such a long period. Additionally, a lot of profit taking could be occurring after such a strong run-up in prices. Prices should consolidate around $1,700 an ounce, before moving back toward $1,900.

Some bullish factors for gold are the murky outlook for economic growth in the U.S., unresolved sovereign debt problems in Europe and geopolitical concerns in the Middle East.

Gold will top $2,000 an ounce, maybe not by September 22nd, but certainly by December 31, 2011. What we are seeing now is just consolidation in an ongoing bull market.

The Master of Disaster

About wfoster2011

Disaster researcher and current financial and economic news and events: Accidents, economics, financial, news, nature, volcanoes, floods, earthquakes, fires; airplane, ship & train wrecks; tornadoes, mine cave-ins, hurricanes, pestilence, blizzards, storms, tzuami's, explosions, pollution, famine; heat & cold waves; nuclear accidents, drought, stampedes and general. Futures trader using high volume and open interest futures markets. Also, a financial, weather and mundane astrologer with over 30 years of experience. Three University degrees from California State University Northridge: BS - Accounting MS - Busines Administration BA - Psychology Served in the U. S. Army as an Armored Platoon Leader in the 5th Battalion, 68th Armored Regiment, 8th Infantry Division (Retired). Have published three books and 36 articles available for sale through my blog: Commodology - Secret of Soyobeans (Financial Astrology) Timing is the Key (Financial Astrology) Scum City, a fiction novel (no longer available, under contract to major publisher) Currently resident of Las Vegas, NV, USA
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