Iraq Quadruples Gold Reserves In Two Months

Gold was down $20.60 or 1.23% in New York yesterday and closed at $1,648.70/oz. Silver dropped to as low as $29.592 and finished with a sharp loss of 3.66%.

Gold is marginally lower in dollars today and on course for its largest weekly drop since June (-2.6%), as COMEX speculators continue to have the upper hand over store of wealth buyers including central banks.

Prices fell below $1,650 an ounce on Thursday for the first time since August despite strong fundamentals which have not changed.

Gold has come under pressure from heavy liquidation by hedge funds and banks on the COMEX this week. The unusual and often ‘not for profit’ nature of the selling, often in illiquid Asian trading, has again led to suspicions of market manipulation.

Short sellers, technical and momentum traders have the upper hand and are pressing their advantage in these less liquid holiday markets. Nervous longs are being stopped out through stop loss orders and concerns regarding the clear downward short term trend.

The recent drop in the gold price has resurrected physical purchases in the market keeping premiums steady at $1 to $1.10/oz above London prices.

“Definitely, there’s physical buying. It’s from all over the place. Physical dealers are buying” a physical trader in Singapore told Reuters.

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