Aug. 26, 2011, 12:01 a.m. EDT
Gold gets good dose of much-needed volatility
$100 moves in gold may become the new norm, analysts say
By Myra P. Saefong, MarketWatch
SAN FRANCISCO (MarketWatch) — The gold market got just what it needed this week: a two-session, $135-an-ounce drop in prices and a stark reminder that the higher the price, the higher the volatility.
“Everyone knew that gold had gotten ahead of itself and we needed to blow away the speculative froth,” said Brien Lundin, editor of Gold Newsletter, adding that traders who sold gold on Wednesday weren’t buying gold for the long term.
“We needed to get back to the levels where investors think gold is not only a value, but a necessity,” he said, and investors will “need to get accustomed to this type of volatility, to both the upside and downside.”
Gold futures fell below $1,800 an ounce on Wednesday, losing a whopping $104 in one session, or 5.6%, the worst one-day percentage drop since March 2008. They traded about 4.8% lower week to date.
“As $100 becomes an ever smaller percentage of the gold price, and as market volatility in general continues to rise, I think it’s reasonable to expect more $100 days in gold,” said Peter Grant, senior metals analyst at USAGold-Centennial Precious Metals Inc.
For now, long-term investors remain unfazed after the declines, but short-term ones were certainly been shaken up a bit.
Only investors that have bought in the past week should be worried about the recent price fall, said Austin Kiddle, a director at London-based bullion brokers Sharps Pixley, referring to the move as “simply a correction” from a technical point of view.
Full story: http://www.marketwatch.com/story/gold-gets-good-dose-of-much-needed-volatility-2011-08-26
Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
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